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Compute the ROI for the Men Wear division for the past year

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Reference no: EM132527863

Question - The Height of Fashion Corporation evaluates the performance of the divisions of the company based on ROI and bonuses are based on divisional ROI. A divisional income statement for the Men's Wear Division for the past year is given below.

Sales $25,000,000

Cost of Goods Sold $10,000,000

Operating Expenses $4,000,000

Invested Assets $50,000,000

a. Generate Height of Fashion Corporation Men's Wear Division's gross profit income statement.

b. Based on your results in part a above, compute the ROI for the Men's Wear division for the past year. Show all work.

c. Height of Fashion also has a Women's Wear Division. Its ROI for the past year was 18%. The company is considering expanding one of its divisions by investing additional assets into that division. The company will only invest additional assets in one of the divisions, not both. In which division should it invest? Why? Be sure your answer convinces me that you understand the meaning of ROI.

Reference no: EM132527863

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