Consider the following 000’s omitted __ Division A Division B Operating assets P 5,000 P 12,500 Operating Income 1,000 2,250 ROI 20 % 18 % Which is a more successful division in terms of ROI ? Using 16 % as the minimum required of return , compute the residual income for each decision. Which division is more successful under this rate ?
Consider the following 000’s omitted __ Division A Division B Operating assets P 5,000 P 12,500 Operating Income 1,000 2,250 ROI 20 % 18 % Which is a more successful division in terms of ROI ? Using 16 % as the minimum required of return , compute the residual income for each decision. Which division is more successful under this rate ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider the following 000’s omitted __
Division A Division B
Operating assets P 5,000 P 12,500
Operating Income 1,000 2,250
ROI 20 % 18 %
- Which is a more successful division in terms of ROI ?
- Using 16 % as the minimum required of return , compute the residual income for each decision. Which division is more successful under this rate ?
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