Question: Spring Bulbs operates two divisions, which are treated as investment centres. Data for each division for the current year are as follows (in '000s): ............................Division
Spring Bulbs operates two divisions, which are treated as investment centres. Data for each division for the current year are as follows (in '000s):
............................Division T ..................Division I
Net income................ $ 85,000................... $210,000
Total assets............... $255,000................... $840,000
The company's required rate of return is 12%. The president wishes to evaluate the performance of these divisions and is not sure whether to use ROI or RI as the performance measure.
REQUIRED
Which division performed better based on the ROI and RI performance measures?
Step by Step Solution
3.45 Rating (161 Votes )
There are 3 Steps involved in it
ROI Division T 85000 255000 333 ROI Division I ... View full answer
Get step-by-step solutions from verified subject matter experts
Document Format (1 attachment)
1157-B-M-A-C-M(3041).docx
120 KBs Word File
