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Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.] Megamart provides the following information on its
Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.] Megamart provides the following information on its two investment centers. Exercise 22-10 (Static) Computing return on investment and residual income; investing decision Lo A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 12%. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 12%. Should the new investment opportunity be accepted
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