Question
Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results: North South Sales
Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results:
North | South | ||
Sales | $6,000,000 | $5,000,000 | |
Operating income | 1 comma 700 comma 0001,700,000 | 1 comma 300 comma 0001,300,000 | |
Taxable income | 1 comma 400 comma 0001,400,000 | 825 comma 000825,000 | |
Investment | 18 comma 000 comma 00018,000,000 | 12 comma 000 comma 00012,000,000 |
The company's desired rate of return is 10%. Income is defined as operating income. Which division has the best return on investment and which division has the best residual income figure, respectively?
A.
South, North
B.
South, South
C.
North, North
D.
North, South
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