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Petra Company has the following information available for one of its divisions: Average operating assets $2, 500,000 Sales $4,000,000 Return on investment (ROI) 40% if

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Petra Company has the following information available for one of its divisions: Average operating assets $2, 500,000 Sales $4,000,000 Return on investment (ROI) 40% if Petra's cost of capital is 25%, what is the division's residual income? $1, 500,000 $1,000,000 $375,000 $975,000 None of the answer choices is correct. If decisions within a company are made by top management at headquarters, which of the following terms best describes this company? cost center. decentralized organization. centralized organization. Investment center. None of the answer choices is correct. Most organizations use only residual income for performance measurement because of the weaknesses associated with using return on investment (ROI). True False

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