Problem
Sprint Company has the following data for 2009:
|
Division A
|
Division B
|
|
Sales Revenue
|
$400,000
|
$300,000
|
|
Contribution margin
|
160,000
|
125,000
|
|
Operating profit
|
80,000
|
30,000
|
|
Division Investment
|
320,000
|
200,000
|
|
Weighted average cost of capital
|
15%
|
15%
|
Sprint Company has a target ROI of 20 percent.
Required:
Calculate the following amounts for each division:
a. Investment Turnover.
b. ROI
c. EVA