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Exercise 15-15 Residual income LO 15-7 Finch Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average
Exercise 15-15 Residual income LO 15-7 Finch Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average operating assets Company's desired rate of return Division A $200,000 $ 16,900 $ 60,000 14% Division B $78,000 $ 8,600 $42,000 14% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is
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