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

Question 88

Essay

Craylon Corp has three divisions,which operate autonomously.Their results for 2015 were as follows:
 East  West  International  Sales $30,000,000$40,000,000$50,000,000 Cost of goods sold 15,000,00025,000,00037,000,000 Operating income 4,500,0005,000,0005,500,000 Investment base 30,000,00032,000,00034,000,000\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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