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Business, 23.04.2021 21:50 IsabellaGracie

Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Peak View Grand
Sales revenue $339,000 $223,000 $300,000
Cost of goods sold 197,000 111,000 188,000
Miscellaneous operating expenses 43,000 32,000 38,000
Average invested assets 1,320,000 960,000 1,185,000.

Required:
a. Compute the return on investment for each division.
b. Compute the residual income for each division.

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