Rate of Return on Investment Commodore Entertainment recently reported sector in

Question

Rate of Return on Investment Commodore Entertainment recently reported sector income from operations, revenue, and invested assets as follows Income from Invested Operations Revenue Assets Media Networks Parks and Resorts Studio Entertainment Consumer Products Use the DuPont formula to determine the rate of return on investment for the four Commodore Entertainment sectors. Round Profit Margin, ROI to one decimal place and Investment Turnover to two decimal places $186,822 62,816 8,592 88,128 $577,800 422,800 286,400 346,800 $963,000 604,000 358,000 204,000 Profit Margin Investment Turnover ROI Media Networks Parks and Resorts Studio Entertainment Consumer Products

Explanation / Answer

Profit Margin:

Media Networks = 186822/577800 = 32.3%

Parks and Resorts = 62816/422800 = 14.8%

Studio Entertainment = 8592/286400 = 3%

Consumer Products = 88128/346800 = 25.4%

Investment Turnover:

Media Networks = 577800 /963000 = 0.60 times

Parks and Resorts = 422800/604000 = 0.70 times

Studio Entertainment = 286400 / 358000 = 0.80 times

Consumer Products = 346800/204000 = 1.70 times

ROI: (as per Dupont formula)

Media Networks = 32.3% * 0.60 = 19.4%

Parks and Resorts = 14.8% * 0.70 = 10.4%

Studio Entertainment = 3% * 0.80 = 2.4%

Consumer Products = 25.4% * 1.7 = 43.18%

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