Compute residual income for each division

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Question - Following is information for two division of Swain Company:

 

Division

 

X

Y

Net income

$42,000

$70,000

Capital investment

$200,000

$350,000

Required -

a. If the company charges each division 10% for the capital employed, compute residual income for each division.

b. Compute the ROI for each division.

c. Which division is performing better?

Reference no: EM133166829

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