How to compute the rate of return for each division

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Reference no: EM132561972

Computing and Interpreting Return on investment

Selected operating data for two divisions of Outlook Brewing, Ltd., of Australia are given below:

                                                                        Division

                                                                Queensland                         New South Wales

Sales:                                               $4,000,000                           $7,000,000

Average Operating Assets:                        $2,000,000                    $2,000,000

Net Operating Income:                                  $360,000                       $420,000

Property, Plant, and equipment (net)                     $950,000                     $800,000

Question 1: Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover

Question 2: Which divisional manager seems to be doing the better job? Why?

Reference no: EM132561972

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