Question: Explain that the following statement is true or false: Recreation Equipment Company has several divisions that are investment centers. Data for the Boat Division and

Explain that the following statement is true or false:

Recreation Equipment Company has several divisions that are investment centers. Data for the Boat Division and the Trailer Division are shown here:

Operating income Total assets at Jan 1 Total assets at Dec 31

With regard to the efficient use of assets, the Boat Division has a higher ROI (Return on Investment) because it has the highest operating income.

Operating income Total assets at Jan 1 Total assets at Dec 31 Boat Division $90,000 $670,000 $710,000 Trailer Division $36,000 $230,000 $220,000

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