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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 1,700,000 1,300,000
Taxable income 1,700,000 775,000
Investment 15,000,000 11,000,000
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, South | |
B. | South, North | |
C. | North, North | |
D. | North, South |
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