E 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 Selected operating data for three of the divisions of the company follow.
tableTrucking Division,Seafood Division,Construction DivisiontableSaiesOperating assets$$$
Required
b Compute the residual income for each division.
E ROI and Residual Income: Assessing Performance
Refer to the computations in the previous exercise E Assess the performance of the division mour conclusions on conclusions on ROI. Assess the performance of the division managers, basing
E
