Investment roi and residual income ri

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Reference no: EM13912332

Manila Div. Bangkok Div.

Net profit ($) 70,000 140,000

Net assets ($) 300,000 650,000

The company has a current cost of capital of 15%.

Required:

a) Calculate the return on investment (ROI) and residual income (RI) for the two divisions and comment on your results.

b)Which method (return on investment or residual income) would be more useful in comparing the two divisions' performance? Why?

c) List three (3) aspects of performance measures that would be appropriate for an auditing firm.

Reference no: EM13912332

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