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3 Benson Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Operating income Average operating assets Company's desired
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Benson Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Operating income Average operating assets Company's desired rate of return Division $202,000 $ 16,200 $ 63,000 140 Division B $86,000 $ 9,500 $36,000 140 Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is Step by Step Solution
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