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Score: out of 10 Question #2 Lilly's Sign Company Operating income Investment Cost of capital Effective tax rate 1,250,000 12,000,000 10.5% 30% Operating income 1,250,000

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Score: out of 10 Question #2 Lilly's Sign Company Operating income Investment Cost of capital Effective tax rate 1,250,000 12,000,000 10.5% 30% Operating income 1,250,000 A manager at Lilly's Sign Company reports the information provided at left related to her investment center. Lilly's effective income tax rate is 30%. The manager's performance is measured using after-tax operating income. a. Compute after-tax return on investment (ROI). Show your work. b. Compute after-tax residual income. Show your work

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