A) Martineau Industries evaluates its divisions as investment centers. The asset
ID: 2478629 • Letter: A
Question
A) Martineau Industries evaluates its divisions as investment centers. The assets, sales, and income of its three divisions are listed below. Calculate return on investment for each division.
____________________________________________________________
Division A Division B Division C
Assets $450,000 $6,320,000 $3,200,000
Sales 750,000 1,880,000 3,000,000
Net Income 55,000 125,600 160,000
____________________________________________________________
Refer to( A) Calculate the return on investment using the DuPont method.
Explanation / Answer
Division A Division B Division C
Assets $450,000 $6,320,000 $3,200,000
Sales 750,000 1,880,000 3,000,000
Net Income 55,000 125,600 160,000
ROI = Net Income/Total Assets
Division A - 12.22%
Division B - 1.98%
Division C - 5%
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