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 ___________%