QUESTION 4 [25 POINTS] International Business is a division of Binus Business School. The following information relates
Posted: Fri Jul 01, 2022 8:47 am
- Question 4 25 Points International Business Is A Division Of Binus Business School The Following Information Relates 1 (141.99 KiB) Viewed 63 times
QUESTION 4 [25 POINTS] International Business is a division of Binus Business School. The following information relates to its performance: Target profit margin Target asset turnover Charge for capital Weighted average cost of capital Income tax rate Investment Total assets Current liabilities Sales Variable costs Fixed costs Allocated common and corporate costs 12% 1.34 times 14% 12.40% 35% $11,300,000 $14,025,000 $ 410,000 $11,600,000 $4,480,000 $ 5,230,000 $818,000 Required: 1. Calculate the DuPont ROI and evaluate the performance of Global Resources in relation to the expected performance. (5 points) 2. Calculate the residual income (RI). (5 points) 3. Calculate the EVA. (5 points) 4. Why are the residual income and EVA different? (5 points) 5. Discuss the appropriateness of the use of ROI, RI and EVA as performance measures. (5 points)