Complete the following calculations in an Excel file. Be sure to show and label your...
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Accounting
Complete the following calculations in an Excel file. Be sure to show and label your work for full credit.
A company has two divisions with the following information:
Division 1
| Sales | 3,000,000 |
| Operating Income | 500,000 |
| Assets Jan. 1 | 4,000,000 |
| Assets Dec. 31 | 4,500,000 |
Division 2
| Sales | 2,000,000 |
| Operating Income | 400,000 |
| Assets Jan. 1 | 2,000,000 |
| Assets Dec. 31 | 2,200,000 |
The minimum required rate of return for the company for all of its divisions is 20%, and its cost of capital is 12%. The company has an income tax rate of 25%. Calculate the following ratios for both divisions:
- return on investment,
- margin,
- turnover,
- residual income, and
- economic value added.
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