Question
Question 1: Return on investment (ROI), residual income (RI) Generic Motors Corporation has two divisions. Division A Division B Investment (operating assets) $200,000 $800,000 Profit
Question 1: Return on investment (ROI), residual income (RI) Generic Motors Corporation has two divisions.
| Division A | Division B | |
| Investment (operating assets) | $200,000 | $800,000 |
| Profit | $32,000 | $104,000 |
The required rate of return (cost of capital) is 10% a year.
A) Compute return on investment (ROI) for each division. ROI for A = % (if your answer is 9.5%, enter 9.5 without the percent sign) ROI for B = % b) Compute the residual income (RI) for each division. RI for A = $ RI for B = $
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
