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QUESTION 4 Best Corporation has two divisions that operate independently of one another. The financial data for the year ended November 2020 reported the following
QUESTION 4 Best Corporation has two divisions that operate independently of one another. The financial data for the year ended November 2020 reported the following results: Petal Setal Sales $6,000,000 $5,000,000 Operating expenses 1,900,000 1,600,000 Taxable income 1,600,000 750,000 Investment 16,000,000 10,000,000 The company's desired rate of return is 20%. Income is defined as operating income. Required: (a) Calculate the operating income of both divisions (4 marks) (b) Calculate the ROI of both divisions [6 marks) (c) Calculate the RI of both divisions [6 marks) (d) Compare the performance of the two divisions [4 marks) (e) Explain Three (3) advantages and Two (2) disadvantages of decentralization. (5 marks]
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