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OR PRINTE R VERSION Question 2 Pharoah Corporation recently announced a bonus plan to reward the manager of its most profitable division. The three divisional managers are to decide which performance measure will be used to evaluate profitability, pharoah Corporation requires a 10% minimum return on investment. The following information is available for the year just ended. Gross Divisional Book Value Operating Division of Assets Income Ashton Drye Poole 800,000 $94,880 744,700 91,440 457,0008,930 (a) Calculate return on investment. (Round ROI to 2 decimal places, e.g. 5.126.) Return on Investment Ashton Drye Poole Which division performed the best? (b) Calculate residual income. (If the amount is negative then enter with a negative sign preceding the number, eos,12s or parentheses, eg. Sis (b) Calculate residual income. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parentheses, e.g. (5,125)) Residual Income Ashton Drye Poole Which division performed the best? (c) Assume that Pharoah Corporation's weighted-average cost of capital is 8% and its tax rate is 21%. Calculate economic value added. (r the amount is negative then enter with a negative sign preceding the number, eg. -5,125 or parentheses, e.g. (5,125)) Economic Value Added Ashton Drye Poole Which division performed the best? Click if you would like to Show Work for this question: gen Show Work

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