Colonial Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, which are bas

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Colonial Pharmaceuticals Is A Small Firm Specializing In New Products It Is Organized Into Two Divisions Which Are Bas 1 (37.57 KiB) Viewed 44 times

Colonial Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, which are based on the products they produce AC Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger SO Division Selected financial data for the past year is shown as follows. Divisional investment is as of the beginning of the year Colonial Pharmaceuticals uses a 8 percent cost of capital and uses beginning-of-the-year investment when computing ROI and residual income. Ignore income taxes Allocated corp. overhead Cost of goods sold Divisional Investment RAD Sales SOLA AC Division $ 670 3,340 10,400 2,700 10,30 910 SO Division $ 1.100 5,600 73,000 2,900 13,000 830 nes Required: a. Compute divisional income for the two divisions b. Calculate the operating margin, which is equivalent to the return on sales, for the two divisions c. Calculate ROI for the two divisions d. Compute residual income for the two divisions Complete this question by entering your answers in the tabs below. Required A Required a Required Required Compute divisional income for the two divisions AC Division So Division Divisional income Herpes Required 3 >