Benson Technologies, Inc. has three divisions. Benson has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income $ 570,000 840,000 390,000 Printer $ 98,610 Copier 98,280 56,940 Fax Total $1,800,000 $253,830 Benson headquarters has $123,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Additional Investments Divisions Printer 14.0% Copier 13.0% Fax 12.0% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? on ROI, whicl manager would be most eager to accept the $123,000 of inve funds? c. Based on ROI, which division manager would be least likely to accept the $123,000 of investment funds? d. Which division offers the best investment opportunity for Benson? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level, (4) At the division level after the additional investment.

Benson Technologies, Inc. has three divisions. Benson has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income $ 570,000 840,000 390,000 Printer $ 98,610 Copier 98,280 56,940 Fax Total $1,800,000 $253,830 Benson headquarters has $123,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Additional Investments Divisions Printer 14.0% Copier 13.0% Fax 12.0% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? on ROI, whicl manager would be most eager to accept the $123,000 of inve funds? c. Based on ROI, which division manager would be least likely to accept the $123,000 of investment funds? d. Which division offers the best investment opportunity for Benson? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level, (4) At the division level after the additional investment.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 4PB: Banyan Industries has two divisions, a tax rate of 30%, and a minimum rate of return of 20%....

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