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Adams Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Division A Division B Operating income $200,000 $
Adams Cough Drops operates two divisions. The following information pertains to each division for Year 1. Sales Division A Division B Operating income $200,000 $ 16,100 $85,000 $ 9,300 Average operating assets. $ 59,000 $37,000 Company's desired rate of return 17% 17% 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
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