Problem 10-28

Problem 10-28

Ashton 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. Ashton Corporation requires a 10% minimum return on investment. The following information is available for the year just ended.

Divisional Gross Book Value Operating Division of Assets Income Bristol $800,000 $94,700 91,010 Darden 756,800 Gregory 445,000 58,310