Investment Center Performance
E 12. Momence Associates is evaluating the performance of three divisions: Maple, Oaks, and Juniper. Using the following data, compute the return on investment and residual income for each division, compare the divisions’ performance, and comment on the factors that influenced performance:
|
Maple |
Oaks |
Juniper |
|
|
Sales |
$100,000 |
$100,000 |
$100,000 |
|
Operating income |
$10,000 |
$10,000 |
$20,000 |
|
Assets invested |
$25,000 |
$12,500 |
$25,000 |
|
Desired ROI |
40% |
40% |
40% |