Mallory,Inc The Imputed Interest for Mallory,Inc

question 110

Essay

Mallory,Inc.has the following data available for two of its divisions for last year: $$\begin{array} { | l | r | r | } \hline & \begin{array} { r } \text { Asian } \\\text { Division }\end{array} & \begin{array} { r } \text { European } \\\text { Dirision }\end{array} \\\hline \text { Sales } & \$ 460,000 & \$ 900,000 \\\hline \text { Contribution Margin } & 184,000 & 470,000 \\\hline \text { Operating income } & 92,000 & 90,000 \\\hline \text { Average operating assets } & 368,000 & 750,000 \\\hline \text { Weighted average cost of } & 14 \% & 14 \% \\\text { capital } & \\\hline\end{array}$$
The imputed interest for Mallory,Inc.is 24%.The tax rate for Mallory,Inc.is 18%.Required:
(1)Compute the following for each division:
(a)Sales margin.(b)Capital turnover.(c)ROI.(d)Residual income.(e)EVA (assume there are no current liabilities).(2)Briefly discuss which division appears most successful and why?

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Definitions:

Generativity

A concern for establishing and guiding the next generation, often expressed through parenting, teaching, mentoring, and contributing to society in a meaningful way.

Self-absorption

Excessive preoccupation with oneself and one's own feelings or affairs.

Drinking Prevention

Efforts and strategies to reduce or prevent the consumption of alcohol, especially underaged drinking or drinking to excess.

Stress Management

Techniques and strategies used to handle stress effectively, promoting mental and physical well-being.