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Oriole Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide which performance

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Oriole Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide which performance measure will be used to evaluate profitability. Oriole Corporation requires a 10% minimum return on investment. The following information is available for the year just ended. Division Ashton Drye Poole Divisional Operating Assets $950,000 870,000 525,000 Divisional Operating Income $109,250 104,400 68,250 Invested Capital $205,000 75,000 125,000 (a) Calculate return on investment. (Round ROI to 2 decimal places, eg. 5.12%.) Return on Investment Ashton % % Drye % Poole Which division performed the best? (b) Calculate residual income. (If the amount is negative then enter with a negative sign preceding the number, e.g.-5,125 or parentheses, eg. (5,125).) Residual Income $ Ashton Drye $ $ Poole Which division performed the best? (c) Assume that Oriole Corporation's weighted average cost of capital is 6% and its tax rate is 22%. Calculate economic value added. (If the amount is negative then enter with a negative sign preceding the number, eg.-5,125 or parentheses, eg. (5,125).) Economic Value Added Ashton $ Drye $ $ $ $ Poole Which division performed the best

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