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Long Beach Pharmaceutical Company has two divisions, which reported the following results for the most recent year. Division I Division II Income $ 900,000 $
Long Beach Pharmaceutical Company has two divisions, which reported the following results for the most recent year. Division I Division II Income $ 900,000 $ 200,000 Average invested capital $6,000,000 $1,000,000 ROI 15% 20% Required: 1. Compute each division's residual income for the year under each of the following assumptions about the firm's cost of acquiring capital. a. 12 percent. b. 15 percent. c. 18 percent. Residual income at 12 percent. __ Residual income at 15 percent. Residual income at 18 percent
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