Spring Bulbs operates two divisions, which are treated as investment centres. Data for each division for the

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 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?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Cost Management Measuring Monitoring And Motivating Performance

ISBN: 9781118168875

2nd Canadian Edition

Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook

Question Posted: