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Top management is trying to determine which would be the best choice of the following investment opportunities: Data of investment choices: 3 Sales $6,000,000 Operating
Top management is trying to determine which would be the best choice of the following investment opportunities:
Data of investment choices: | 3 |
Sales | $6,000,000 |
Operating income | 360,000 |
Average operating assets | 3,000,000 |
Required: Compute the Return on investment
Required: Compute the Residual Incomeassuming a minimum required rate of return of 8%.
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