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Investment Center Sales Income Average Assets Electronics Sporting goods $ 40,500,000 20,740,000 $ 2,916,000 2,074,000 $ 16,200,000 12,200,000 1. Compute return on investment for
Investment Center Sales Income Average Assets Electronics Sporting goods $ 40,500,000 20,740,000 $ 2,916,000 2,074,000 $ 16,200,000 12,200,000 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Return on Investment Numerator: Denominator: Electronics Sporting Goods Which center is most efficient at using assets to generate income? Required Return on Investment Required 2 >
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