Urbandale Company has two fabric divisions-Linen and Cotton. The following information is available: $$\begin{array} { l l l }
& \text { Linen } & \text { Cotton } \
\text { Revenue } & \$ 200,000 & \$ 250,000 \
\text { Income } & 30,000 & 90,000 \
\text { Invested capital } & 100,000 & 150,000 \
\text { Cost of capital } & 12 \% & 10 \%
\end{array}$$ Compute the following for each division:
a. ROI
b. return on sales
c. capital turnover
d. residual income

Question

Urbandale Company has two fabric divisions-Linen and Cotton. The following information is available: $$\begin{array} { l l l } 
& \text { Linen } & \text { Cotton } \
\text { Revenue } & \$ 200,000 & \$ 250,000 \
\text { Income } & 30,000 & 90,000 \
\text { Invested capital } & 100,000 & 150,000 \
\text { Cost of capital } & 12 \% & 10 \%
\end{array}$$ Compute the following for each division:
a. ROI
b. return on sales
c. capital turnover
d. residual income

Quizplus · Accepted Answer

The Answer of Urbandale Company has two fabric divisions-Linen and Cotton. The following information is available: $$\begin{array} { l l l } 
& \text { Linen } & \text { Cotton } \
\text { Revenue } & \$ 200,000 & \$ 250,000 \
\text { Income } & 30,000 & 90,000 \
\text { Invested capital } & 100,000 & 150,000 \
\text { Cost of capital } & 12 \% & 10 \%
\end{array}$$ Compute the following for each division:
a. ROI
b. return on sales
c. capital turnover
d. residual income

Urbandale Company Has Two Fabric Divisions-Linen and Cotton Compute the Following for Each Division: A

Urbandale Company Has Two Fabric Divisions-Linen and Cotton Compute the Following for Each Division:
A