The following information is available for the three divisions of the Top Company: Required: a. Determine the

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The following information is available for the three divisions of the Top Company:

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Required:

a. Determine the return on investment for each division.

b. Determine the residual income for each division.

c. Rank the three divisions assuming they are considered profit centers.

d. Rank the three divisions assuming they are considered investment centers and performance is evaluated based on return on investment.

e. Rank the three divisions assuming they are considered investment centers and performance is evaluated based on residual income.

f. Why do some of the rankings for parts

c, d, and e differ?

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