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

question 17

Essay

Craylon Corp has three divisions,which operate autonomously.Their results for 2015 were as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { East } & \text { West } & \text { International } \\\hline \text { Sales } & \$ 30,000,000 & \$ 40,000,000 & \$ 50,000,000 \\\hline \text { Cost of goods sold } & 15,000,000 & 25,000,000 & 37,000,000 \\\hline \text { Operating income } & 4,500,000 & 5,000,000 & 5,500,000 \\\hline \text { Investment base } & 30,000,000 & 32,000,000 & 34,000,000 \\\hline\end{array}$$ 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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Definitions:

Best Poor Man's Country

A historical notion that certain regions, notably parts of early America, offered exceptional opportunities for economic advancement to the economically disadvantaged.

Pennsylvania

A state located in the northeastern part of the United States, known for its historical significance in the founding of the country.

Walking Purchase

A controversial 1737 land deal in which the Penn family and colonists claimed a large area of land in Pennsylvania through a fraudulent walking survey.

Indians

Indians refers to the indigenous peoples of the Indian subcontinent, or in a historical American context, Native Americans, the original inhabitants of the Americas prior to European colonization.