Oswego Company has three divisions: A, B, and C. The company has a hurdle rate o

Question

Oswego Company has three divisions: A, B, and C. The company has a hurdle rate of 7.25 percent. Selected operating data of the three divisions are as follows:

Division A........Division B............Division C
Sales.......................................$1,262,000........$934,000.............$915,000
Cost of goods sold.........................772,000............657,000..............637,000
Miscellaneous operating expenses.....56,000..............52,000..............52,100
Allocated corporate expenses............47,000.............35,000..............36,500
Average invested assets.................4,210,000.........3,920,000..........3,295,000

Oswego is considering an expansion project in the upcoming year that will cost $5.00 million and return $417,000 per year. The project would be implemented by only one of the three divisions.


1. Compute the ROI for each division. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

ROI
Division A ___________%
Division B ___________%
Division C ___________%

Explanation / Answer

5 8 9.8

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