Frenchs Forest Publishing Company Has Three Divisions That Operate Autonomously

Essay

Frenchs Forest Publishing Company has three divisions that operate autonomously.Their results for 2017 are as follows:
$$\begin{array} { | l | r | r | r | } \hline & { \text { Academic } } & { \text { Fiction } } & { \text { Non-fiction } } \\\hline \text { Sales } & \$ 15000000 & \$ 17000000 & \$ 20000000 \\\hline \text { Contribution margin } & 1440000 & 1700000 & 3500000 \\\hline \text { Operating profit } & 1500000 & 1200000 & 2120000 \\\hline \text { Investment base } & 7000000 & 5000000 & 14000000 \\\hline\end{array}$$
The company's desired rate of return is 20%.
Required:
a.Calculate each division's ROI.
b.Calculate each division's residual income.
c.Rank each division by both ROI and residual income.
d.Which division had the best performance in 2017? Why?
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