E23-27. ROI and Residual Income: Basic Computations Watkins Associated Industries is a privately...

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E23-27. ROI and Residual Income: Basic Computations
Watkins Associated Industries is a privately held conglomerate. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 15%. Selected operating data for three of the divisions of the company follow.
\table[[,Trucking Division,Seafood Division,Construction Division],[\table[[Saies.],[Operating assets]],$6,450,000,$1,845,000,$5,200,000
Required
b. Compute the residual income for each division.
E23-28. ROI and Residual Income: Assessing Performance
Refer to the computations in the previous exercise E23-27. Assess the performance of the division mour conclusions on conclusions on ROI. Assess the performance of the division managers, basing
E23-27.
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