Question
Jordan Company has two divisions, which reported the following results for the most recent year. Division I Division II Income 02,700,000 00,600,000 Average invested capital
Jordan Company has two divisions, which reported the following results for the most recent year.
| Division I | Division II | |
| Income | 02,700,000 | 00,600,000 |
| Average invested capital | 18,000,000 | 03,000,000 |
| ROI | 15% | 20% |
Imputed interest rate = 10%
Under residual income, which division is considered to have a better performance?
Division I
Neither Division I nor II
Division II
Cannot be determined
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
5th edition
978-1259728877, 1259728870, 978-1259565403
