(Solution) - The financial results for the past two years for Ornamental -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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The financial results for the past two years for Ornamental Iron, a division of Iron Foundry Company, follow:

Required
1. Compute the division?s profit margin, asset turnover, and return on investment for this year and last year. Beginning total assets for last year were $157,900. Round to two decimal places.
2. The desired return on investment for the division has been set at 12 percent. Compute Ornamental Iron?s residual income for this year and last year.
3. The cost of capital for the division is 8 percent. Compute the division?s economic value added for this year and last year.
4. Before drawing conclusions about this division?s performance, what additional information would you want?