Willow brook Company has the following data for this year:
|
|
Bottling Division
|
Mixing Division
|
|
Average operating assets
|
$320,000
|
$ 800,000
|
|
Contribution margin
|
160,000
|
500,000
|
|
Operating income
|
80,000
|
120,000
|
|
Sales
|
500,000
|
1,300,000
|
|
Weighted-average cost of capital
|
17%
|
17%
|
Willow brook Company has a target ROI of 17 percent.
Required: Calculate the following amounts for each division:
a. Return on sales ratio
b. Operating investment turnover
c. ROI
d. Residual income