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    ROI of Losen division of McCarthy Corporation

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    As the manager of Losen division of McCarthy Corporation, you are interested in determining the division's return on investment. As division manager you have no control over financing assets, but you control acquisition and disposition of assets. The division controller has given you the following data to aid you in calculating a return on investment.

    Fiscal Year, January 1 to December 31 (000 omitted):

    Total Assets, January 1 400,000
    Total Assets, December 31 525,000
    Long-term debt, January 1 75,000
    Long-term debt, December 31 96,000
    Owners equity, January 1 278,000
    Owners equity, December 31 303,000
    New income for the year 54,000
    Interest expense on long term debt 4,200

    Tax rate = 30%

    Questions to answer
    What method would be most appropriate for calculating the division's return on investment (ROI)? Why?
    Using this method, what is the ROI for the current year?

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    https://brainmass.com/business/financial-ratios/roi-of-losen-division-of-mccarthy-corporation-124802

    Solution Preview

    As the manager of Losen division of McCarthy Corporation, you are interested in determining the division's return on investment. As division manager you have no control over financing assets, but you control acquisition and disposition of assets. The division controller has given you the following data to aid you in calculating a return on investment.

    Fiscal Year, January 1 to ...

    Solution Summary

    This solution is comprised of a detailed explanation and calculation to find ROI of Losen division of McCarthy Corporation.

    $2.19

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