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Exercise 10-20 Presented below is selected information for three regional divisions of Medina Company. Divisions North West Contribution margin Controllable margin Average operating assets Minimum
Exercise 10-20 Presented below is selected information for three regional divisions of Medina Company. Divisions North West Contribution margin Controllable margin Average operating assets Minimum rate of return $300,000 $140,000 $1,000,000 $499,700 $360,000 $1,440,000 South $399,500 $210,000 $1,500,000 13% 14% 8 % Compute the return on investment for each division. North Division West Division South Division LINK TO TEXT Compute the residual income for each division. North Division West Division South Division LINK TO TEXT Assume that each division has an investment opportunity that would provide a rate of return of 16%. If ROI is used to measure performance, which division or divisions will probably make the additional investment? (2) If residual income is used to measure performance, which division or divisions will probably make the additional investment? residual inc
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