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Problem 12-4 Comparing Performance Using ROI (LO2 - CC4, 6) Guenther Corporation uses the return on investment (ROI) measure to evaluate its managers. A summary
Problem 12-4 Comparing Performance Using ROI (LO2 - CC4, 6) Guenther Corporation uses the return on investment (ROI) measure to evaluate its managers. A summary of the performance fdisns is iven belowr Average operating assets Net income Division ADivision B $190,000 $220,000 24,200 22,800 The minimum required return on operating assets for Guenther Corporation is 9%. Required: 1-a. Compute the return on investment of Division A and Division B. Division A Division B Return on investment 1-b. According to Guenther's senior management, which division is the better performer? O Division A Division B 2-a. Compute the residual income of Division A and Division B. Division A Division B Residual income
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