1. Compute return on assets for each of these Best Buy divisions (each is an investment center). Comment on the relative performance of each investment center. Round percents to one decimal.
|
Investment Center |
Net Income |
Average Assets |
Return on Assets |
|
Cameras and camcorders |
$4,500,000 |
$20,000,000 |
|
|
Phones and communications |
1,500,000 |
12,500,000 |
|
|
Computers and accessories |
800,000 |
10,000,000 |
2 .Assume a target income of 12% of average invested assets. Compute residual income for each of Best Buy’s divisions.