Three divisions of Donald Duck Gym's report the following sales and operating data: Huey Dewey...
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Accounting
Three divisions of Donald Duck Gym's report the following sales and operating data: Huey Dewey Louie Sales $1,200,000 $1,500,000 $800,000 Operating Income $60,000 $75,000 $48,000 Average operating assets $400,000 $500,000 $200,000 Minimum required rate of return 12% 13.5% 13% Required: A. Compute the Return on Investment for each division. B. Compute the residual income for each division. C. Each division is presented with an opportunity to invest in a project that would yield a return on investment of 15.5%. Evaluate it by each division from both return on investment and residual income separately and determine if the manager of each division will accept it or reject it and why
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