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 900 comma 0001,900,000 | 1 comma 700 comma 0001,700,000 |
Taxable income | 1 comma 800 comma 0001,800,000 | 850 comma 000850,000 |
Investment | 18 comma 000 comma 00018,000,000 | 11 comma 000 comma 00011,000,000 |
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?
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