The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation
The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
- The Global Products Corporation has three subsidiaries.
|
|
Medical Supplies |
Heavy Machinery |
Electronics |
|
Sales |
$20,040,000 |
$5,980,000 |
$4,730,000 |
|
Net Income (after taxes) |
1,700,000 |
592,000 |
402,000 |
|
Assets |
8,340,000 |
8,760,000 |
3,570,000 |
- If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of
return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation?
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