Reference no: EM132968701
Question - Adrenaline Sports Company makes? snowboards, downhill? skis, cross-country? skis, skateboards,? surfboards, and inline skates. The company has found it beneficial to split operations into two divisions based on the climate required for the? sport: Snow Sports and? Non-snow Sports. The following divisional information is available for the past? year:
Snow Sports
Net Sales Revenue 5,000,000
Operating Income 950,000
Average Total Assets 4,300,000
ROI 22.1%
Non-snow Sports
Net Sales Revenue 8,000,000
Operating Income 1,520,000
Average Total Assets 6,400,000
ROI 23.8%
Adrenaline?'s management has specified a 14?% target rate of return. Compute each? division's RI. Interpret your results. Are your results consistent with each? division's ROI?