MGAB03H3 Study Guide - Final Guide: Earnings Before Interest And Taxes, Contribution Margin, Infor

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20 Jan 2016

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Faced with headquarters" desire to add a new product line, stefan grenier, manager of bilti. Products" east division, felt that he had to see the numbers before he made a move. His division"s return on investment (roi) had led the company for three years, and he don"t want any letdown. Bilti products is a decentralized wholesaler with four autonomous divisions. The divisions are evaluated on the basis of roi, with year-end bonuses given to divisional managers who have the highest roi. Operating results for the company"s east division for last year are given below: The company had an overall roi of 18% last year (considering all divisions). The new product line that headquarters wants grenier"s east division to add would require an investment of. The cost and revenue characteristics of the new product line per year would be as follows: Gerbig company"s electrical division produces a high-quality transformer. Sales and cost data on the transformer follow:

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