Hargrave Products Has Three Divisions,which Operate Autonomously The Company's Desired Rate of Return Is 15

question 19

Essay

Hargrave Products has three divisions,which operate autonomously.Their results for 2017 were as follows:
$$\begin{array} { | l | r | r | r | } \hline & { \text { East } } & { \text { West } } & \text { International } \\\hline \text { Sales } & \$ 30000000 & \$ 40000000 & \$ 50000000 \\\hline \text { Cost of goods sold } & 15000000 & 25000000 & 37000000 \\\hline \text { Operating profit } & 4500000 & 4750000 & 5000000 \\\hline \text { Investment base } & 30000000 & 30500000 & 31000000 \\\hline\end{array}$$
The company's desired rate of return is 15%.
Required:
a.Compute each division's ROI (round to three decimal places).
b.Compute each division's residual income.
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