Question 2 Three divisions of Marley Co report the following sales and operating data Sales Average operating assets Operating income Minimum required rate of return Required Fitness Training 600,000 200,000 30,000 10 Spa Services 750,000 250,000 37,500 12 Athletic Wear 400,000 100,000 24,000 10 1 Compute the ROI for each division 2 Computer the residual income for each division 3 Assume that each division is presented with an investment opportunity that would yield a rate of return of 17 a If performance is being measured by ROI, which division(s) will probably accept the opportunity Reject it Why b If performance is being measured by residual income, which division(s) will probably accept the opportunity Reject it Why Question 2 Three divisions of Marley Co report the following sales and operating data Required 1 Compute the ROI for each division 2 Computer the residual income for each division 3 Assume that each division is presented with an investment opportunity that would yield a rate of return of 17 a If performance is being measured by ROI, which division(s) will probably accept the opportunity Reject it Why b If performance is being measured by residual income, which division(s) will probably accept the opportunity Reject it Why

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Question  2  Three divisions of Marley Co  report the following sales and operating data  Sales Average operating assets Operating income Minimum required rate of return Required  Fitness Training 600,000 200,000 30,000 10  Spa Services 750,000 250,000 37,500 12  Athletic Wear 400,000 100,000 24,000 10  1  Compute the ROI for each division  2  Computer the residual income for each division  3  Assume that each division is presented with an investment opportunity that would yield a rate of return of 17   a  If performance is being measured by ROI, which division(s) will probably accept the opportunity  Reject it  Why  b  If performance is being measured by residual income, which division(s) will probably accept the opportunity  Reject it  Why  Question   2  Three divisions of Marley Co  report the following sales and operating data  Required  1  Compute the ROI for each division  2  Computer the residual income for each division  3  Assume that each division is presented with an investment opportunity that would yield a rate of return of 17   a  If performance is being measured by ROI, which division(s) will probably accept the opportunity  Reject it  Why  b  If performance is being measured by residual income, which division(s) will probably accept the opportunity  Reject it  Why

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Question #2: Three divisions of Marley Co. report the following sales and operating data: Sales Average operating assets Operating income Minimum required rate of return

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