Reference no: EM132806613

Case Tractor Company allows its divisions to operate as autonomous units. Their results for the current year were as follows:

                                              ? Plows                      Tractors

Revenues                      $2,250,000                $500,000

Current assets                     800,000             152,500

Capital assets                  1,000,000               400,000

Current liabilities                  350,000             75,000

Net operating income             220,000              60,000

After-tax income                     143,000             39,000

Weighted average cost of capital   8.5%               8.5%

Required:

Problem 1: Compute the following for the Plows division

a. return on sales

b. return on investment based on total assets employed

c. economic value added