Question: Consider the following data, which relate to the two divisions of Oak Ridge Products: Division 1 Division 2 Total assets $68,300,000 $23,100,000 Noninterest-bearing current liabilities
Consider the following data, which relate to the two divisions of Oak Ridge Products:
| Division 1 | Division 2 | |||
| Total assets | $68,300,000 | $23,100,000 | ||
| Noninterest-bearing current liabilities | 4,490,000 | 2,400,000 | ||
| NOPAT | 11,200,000 | 5,900,000 | ||
| Required rate of return | 11% | 10% |
Compare the two divisions in terms of return on investment and residual income. In the past year, which division has created the most wealth for Oak Ridge shareholders? (Round ROI to 2 decimal place, e.g. 15.25%. Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
| Division 1 | Division 2 | ||||
| ROI | % | % | |||
| Residual income/EVA |
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