Boomerang Products Has Three Divisions,which Operate Autonomously The Company's Desired Rate of Return Is 25

question 108

Essay

Boomerang Products has three divisions,which operate autonomously.Their results for 2017 were as follows:
$$\begin{array} { | l | r | r | r | } \hline & { \text { Standard } } & { \text { Deluxe } } & { \text { Supreme } } \\\hline \text { Sales } & \$ 30000000 & \$ 40000000 & \$ 50000000 \\\hline \text { Cost of goods sold } & 15000000 & 25000000 & 37000000 \\\hline \text { Operating profit } & 4500000 & 4750000 & 5000000 \\\hline \text { Investment base } & 18000000 & 18555000 & 18650000 \\\hline\end{array}$$
The company's desired rate of return is 25%.
Required:
a.Calculate each division's ROI (round to three decimal places).
b.Calculate each division's residual income.
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Distinguish between annually, cyclically, and functionally balanced budgets and their economic rationales.

Recognize the historical trends and policy shifts in U.S. budget deficits and national debt.

Evaluate the impact of government spending and tax policies on economic cycles.

Understand the political and economic considerations in creating and implementing the federal budget.

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Definitions:

Tokugawa Shogunate

The last feudal Japanese military government which existed between 1603 and 1868, led by the Tokugawa family.

Katsura Imperial Villa

A masterpiece of Japanese architecture and garden design located in Kyoto, illustrating the height of aristocratic culture in the Edo period.

Tang Dynasty

A dynasty in China (618-907 AD) known for its cultural, artistic, and intellectual advancements, as well as its cosmopolitan capital, Chang'an.

Zen Simplicity

An aesthetic and philosophical concept emphasizing minimalism, naturalness, and intuitive understanding, rooted in Zen Buddhism.