for part c is it north or south e Branden Wilcox Return on Investment and Residu
ID: 2541931 • Letter: F
Question
for part c is it north or south
e Branden Wilcox Return on Investment and Residual Income The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20x5 reported the following results: inciples nting Operating income 750,000 550,000 650,000 375,000 6,000,000 5,000,000 epts and the company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. nting North 096 ased 0% b. What are the respective residual incomes of the North and South divisions? ion Making t Costs and t and which division has the better residual income figure? on investment ng and ce AnalysisExplanation / Answer
Solution a:
Solution b:
Solution c:
From above computation, it is very clear that:
North division has the better return on investment as compared with South division.
Further North division has also better residua income as compared with South division.
Computation of Return on Investment Particulars North South Operating Income $750,000.00 $550,000.00 Investment $6,000,000.00 $5,000,000.00 ROI (Operating Income / Investment) 13% 11%Related Questions
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