ROI and Economic Profit Calculations
|
X
|
Y
|
Z
|
|
invested capital
|
$1,050,000
|
$_______
|
$1,200,000
|
|
income
|
$________
|
$142,800
|
$210,000
|
|
revenue
|
$2,310,000
|
$2,856,000
|
$_______
|
|
return on sales
|
3.00%
|
________%
|
_________%
|
|
capital turnover
|
_________
|
________
|
3.5
|
|
rate of return o invested capital
|
_________%
|
10.50%
|
__________%
|
1.Prepare a similar tabular presentation, filling in all blanks.
2.Suppose each division is assessed a capital charge based on a cost of capital of 10% of invested capital. Compute the economic profit for each division.
3.Which division is the best performer? Explain.