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38) Capital Investments has three divisions. Each division's required rate of return is 15%. Planned...

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Accounting

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38) Capital Investments has three divisions. Each division's required rate of return is 15%. Planned operating results for 20X5 are as follows: Division A B C Operating income $15,000,000 $25,000,000 $11,000,000 Investment $100,000,000 $125,000,000 S 50,000,000 The company is planning an expansion, which will require each division to increase its investments by $25,000,000 and its income by $4,500,000. Required: a. Compute the current ROI for each division. b. Compute the current residual income for each division. c. Rank the divisions according to their current Rols and residual incomes. d. Determine the effects after adding the new project to each division's ROI and residual income

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