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ROI and Residual Income A multinational corporation has a number of divisions, two of which are the North American Divsion and the Pacific Rim Division.

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ROI and Residual Income A multinational corporation has a number of divisions, two of which are the North American Divsion and the Pacific Rim Division. Data on the two divisions are as follows Round alf rates of return to four significant digits. Required: 1. Compute residual income for each division. By comparing resioual income, is it possible to make a useful comparison of divisional performance? 2. Compute the residual rate of return by dividing the residual incorve by the average cperatine assets. Enter your answers as percentages, rounded to two decimal places. For example, the decimal value , 03827 would be entered as "3.83" percent. Is it possible now to say that ene division outperformed the other? 3. Compute the retum on irwestment for each division. Enter your answers as percentages, rounded to two decimal places. For example, the decimal value 03827 would be entered as " 3.83 percent. Can we make meaningful comparisans of divisional performance? 4. Add the residuat rate of retum cemputed in Requirement 2 to the required rate of retum. Enter your answers as percentages, rounded to two decimal places. For example, the decimal value .03827 would be entered as " 3.83 " percent. Compare these rates with the for computed in Requirement 3. Wil this relatonship wwars be the fame

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