Suppose each division is assessed a capital charge based on

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Reference no: EM13484015

ROI and Economic Profit Calculations

	X	Y	Z
invested capital	$1,050,000	$_______	$1,200,000
income	$________	$142,800	$210,000
revenue	$2,310,000	$2,856,000	$_______
return on sales	3.00%	________%	_________%
capital turnover	_________	________	3.5
rate of return o invested capital	_________%	10.50%	__________%

1.Prepare a similar tabular presentation, filling in all blanks.

2.Suppose each division is assessed a capital charge based on a cost of capital of 10% of invested capital. Compute the economic profit for each division.

3.Which division is the best performer? Explain.

Reference no: EM13484015

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