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Tesla evaluates divisional performance: Division A (Operating income $2,000,000, Assets $10,000,000), Division B (Operating income $1,500,000, Assets $8,000,000). Requirements: Calculate the return on investment (ROI)
- Tesla evaluates divisional performance: Division A (Operating income $2,000,000, Assets $10,000,000), Division B (Operating income $1,500,000, Assets $8,000,000).
- Requirements:
- Calculate the return on investment (ROI) for each division.
- Calculate the residual income for each division.
- Rank divisions based on ROI and residual income.
- Discuss the strengths and limitations of ROI and residual income as performance metrics.
- Requirements:
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
6th Canadian edition
1118644948, 978-1118805084, 1118805089, 978-1118644942
