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Compute the ROI of each division stated

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Reference no: EM133076134

Question - Company Ltd. has two different product lines, cupcakes and cookies. The most recent financial information indicated total cupcake sales of $300,000 and profit of $15,000. This division had $100,000 of average operating assets throughout the year. Total cookie sales were $500,000 with profit of $50,000. The cookie product line had average operating assets of $250,000. The company has indicated that the minimum required return for any product line it offers is 16%.

Required -

a) Compute the ROI of each division stated in terms of margin and turnover.

b) Which division is doing better and why?

Reference no: EM133076134

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