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You have to calculate the return on investment and the residual income, and this is the only information given. There are three parts ? c,

You have to calculate the return on investment and the residual income, and this is the only information given. There are three parts ? c, d and e ? and I got c, but I don't know how to do the others. Help?

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Problem 15-23 Comparing return on investment and residual income LO 15-6, 15-7 Solomon Corporation operates three investment centers. The following nancial statements apply to the investment center named Bowman Division. BOWMAN DIVI S ION Income Statement For the Year Ended December 31, 2018 Sales revenue $106,380 Cost of goods sold 58,975 Gross margin 47,405 Operating expenses Selling expenses (2,800] Depreciation expense (4,125) Operating income 40,480 Nonoperating item Loss of sale of land (3,100) Net income 5 37,380 BOWMAN DIVISION Balance Sheet As of December 31, 2018 Assets Cash S 12,622 Accounts receivable 40,326 Merchandise inventory 37,800 Equipment less accumulated depreciation 90,278 Nonoperating assets 10,200 Total assets $191,226 Liabilities Accounts payable 5 9,477 Notes payable 71,000 Stockholders' equity Common stock 75,000 Retained earnings 35,749 Total liabilities and stockholder's equity 31917225 Required c. Calculate the ROI for Bowman. d. Solomon has a desired ROI of 13 percent. Headquarters has $88,000 of funds to assign to its investment centers. The manager of the Bowman Division has an opportunity to invest the funds at an ROI of 15 percent. The other two divisions have investment opportunities that yield only 14 percent. Calculate the new ROI for Bowman division, ifthe investment opportunity is adopted by Bowman. e. Based on the original data, calculate the original residual income. Also, calculate the new residual income based on information provided in Requirement d

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