A company operates five different plants, located in Vancouver, Edmonton, Toronto, Montreal, and Halifax. The total company

Question:

A company operates five different plants, located in Vancouver, Edmonton, Toronto, Montreal, and Halifax. The total company operating income is $1,900,275. The following information was collected for each location:
A company operates five different plants, located in Vancouver, Edmonton,

Instructions
(a) Determine which plant has the highest return on investment. Show your calculations.
(b) Assume that the company requires a minimum return of 10% on the current investment. Which plant has the highest residual income? Show your calculations.
(c) Compare your answers in parts (a) and (b) and indicate whether they are the same or different. Explain why.

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Related Book For  book-img-for-question

Managerial Accounting Tools for Business Decision Making

ISBN: 978-1118856994

4th Canadian edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

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