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Question 2 Blossom Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide
Question 2 Blossom 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. Blossom Corporation requires a 10% minimum return on investment. The following information is available for the year just ended. Divisional Book Value Operating Gross Division of Assets Ashton Drye Poole Income $800,000 749,300 459,000 $94,400 91,370 58,090 (a) Calculate return on investment. (Round R01 to 2 decimal places, eg. 5.1296.) 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, e.g. (5,125).) Residual Income Ashton $ Drye $ Poole $
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