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The sales, operating income, and invested assets for each division of Wren Company are as follows: Operating Invested Sales Income Assets Division c $5,000,000
The sales, operating income, and invested assets for each division of Wren Company are as follows: Operating Invested Sales Income Assets Division c $5,000,000 $630,000 $4,000,000 Division D 6,800,000 760,000 3,900,000 Division E 3,750,000 750,000 7,500,000 Management has established a minimum acceptable return on investment of 8%. a. Determine the residual income for each dision. Division C: Division D: Division E: b. Based on residual income, which division is the most profitable?
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