Question: Can you explain question c? Question #1: Assume the Brando Division of MH Enterprises, Inc. had the following results this past year (expressed in thousands).

Can you explain question c?

Question #1: Assume the Brando Division of MH Enterprises, Inc. had the following results this past year (expressed in thousands). The companys management has a required rate of return of 10% and MH Enterprises weighted average cost of capital is 8%.. Mh Enterprises effective tax rate is 30%.

Sales

$3,000,000

Operating income

$500,000

Total assets

$4,500,000

Current liabilities

$300,000

  1. What is Brando Divisions return on investment? Be sure to show your work!
  2. What is Brando Divisions residual income? Be sure to show your work!
  3. Which is a better measure (ROI or residual income) to evaluate a Divisions performance. (Please note that you will need to research the advantages and disadvantages of ROI vs Residual Income. This question is not an opinion question.)

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