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Brief Exercise 25.3 (Static) Comparing ROI and Residual Income (LO25-2, LO25-4). Proctor Corporation has multiple facilities across the United States. Management evaluates each Facility based
Brief Exercise 25.3 (Static) Comparing ROI and Residual Income (LO25-2, LO25-4). Proctor Corporation has multiple facilities across the United States. Management evaluates each Facility based on the capital turnover ratio using the DuPont system. The following information pertains to the facility in Pennsylvania for the past year. Sales$ 6,300,000. Operating expenses 2,940,000. Total assets ( prior to subtracting accumulated depreciation ) 10,500, 000. Accumulated depreciation 656,250. a. Compute the ROI for the Pennsylvania facility using total assets and assets net depreciation. b. Find the residual income of the company expects a 30 percent return on total assets. c. Is the Pennsylvania facility performing up to management's expectations? Compute the ROI for the Pennsylvania facility using total assets and assets net of depreciation ( Round final answers to nearest whole percent)
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