Batman Abstract Company Has Three Divisions That Operate Autonomously The Company's Desired Rate of Return Is 20

Essay

Batman Abstract Company has three divisions that operate autonomously.Their results for 2015 are as follows:
$$\begin{array} { | l | r | r | r | } \hline & { \text { Riddler } } & { \text { Joker } } & { \text { Penguin } } \\\hline \text { Sales } & \$ 5,000,000 & \$ 7,000,000 & \$ 10,000,000 \\\hline \text { Contribution margin } & 1,440,000 & 1,700,000 & 3,500,000 \\\hline \text { Pperating income } & 1,000,000 & 1,750,000 & 2,520,000 \\\hline \text { Investment base } & 9,000,000 & 10,000,000 & 14,000,000 \\\hline\end{array}$$ The company's desired rate of return is 20%.
Required:
a.Compute each division's ROI.
b.Compute each division's residual income.
c.Rank each division by both ROI and residual income.
d.Which division had the best performance in 2015? Why?