Question
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Megamart provides the following
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Megamart provides the following information on its two investment centers. Sales Investment Center Electronics Income Sporting goods $ 41,000,000 18,600,000 $ 2,624,000 1,860,000 Average Assets $ 16,400,000 12,400,000 Exercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Return on Investment Numerator: / Denominator: Electronics Sporting Goods / Which center is most efficient at using assets to generate income? Return on Investment = == Required 1 Required 2 >
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