Question

Top management is trying to determine a consistent but fair valuation system to use to evaluate each of its four divisions. This year’s performance data are summarized as follows:


Required
A. Which division would earn a bonus if top management used ROI based on operating assets?
B. Which division would earn a bonus if top management used ROI based on operating assets minus current liabilities?
C. Which division would earn a bonus if top management calculated residual income based on operating assets with a minimum return of 12 percent?
D. Which division would earn a bonus if top management calculated residual income based on operating assets minus current liabilities with a minimum return of 12percent?


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  • CreatedMarch 11, 2015
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