The Eastern Division of Geographic Inc. reported the following data for last year Sales Operating...
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The Eastern Division of Geographic Inc. reported the following data for last year Sales Operating expenses Average Operating Assets Minimum Required Rate of Return (ROR) $642,000 $598,000 $250,000 15% Required: 1. Calculate the return on investment (ROI) for last year using margin and turnover (2 marks) 2. Calculate the residual income (RI) for last year. (3 marks) 3. The manager of the Eastern Division has an investment opportunity that will generate a return of 17%. If performance is evaluated using residual income, will the manager accept the opportunity? Explain why or why not using the data provided and your calculations in your explanation (1 mark)
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