Question
4. Travel Company has three segments: Air, Land, and Sea. Data concerning income and investment follow: Air Land Sea Contribution to indirect expenses $ 43,200
4. Travel Company has three segments: Air, Land, and Sea. Data concerning income and investment follow:
|
| Air | Land | Sea |
| Contribution to indirect expenses | $ 43,200 | $ 86,400 | $ 115,200 |
| Assets directly used by and identified with the segment | 288,000 | 576,000 | 1,296,000 |
Assuming that the cost of capital on investment is 12 per cent, calculate the residual income of each of the segments. Do the results indicate that any of the segments should be eliminated?
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Security Audit And Control Features SAP ERP
Authors: Deloitte Touche Tohmatsu Research Team And Isaca
3rd Edition
1604201150, 978-1604201154
