Question
The income from operations and the amount of invested assets in each division of Stewart Industries are as follows: Income from Operations Invested Assets Retail
The income from operations and the amount of invested assets in each division of Stewart Industries are as follows: Income from Operations Invested Assets Retail Division $9,350,000 $55,000,000 Commercial Division 10,640,000 38,000,000 Internet Division 2,240,000 16,000,000 a. Compute the return on investment for each division. b. Which division is the most profitable per dollar invested? 4. Based on the data in question #3 above, assume that management has established an 8% minimum acceptable return for invested assets. a. Determine the residual income for each division. b. Which division has the most residual income?
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