uestion #1: Assume the Brando Division of MH Enterprises, Inc. had the following results this...
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uestion #1: Assume the Brando Division of MH Enterprises, Inc. had the following results this past year (expressed in thousands). The company's management has a required rate of return of 10% and MH Enterprises, weighted average cost of capital is 8-Mh Enterprises, effective tax rate is 30%. Sales Operating income Total assets Current liabilities S3,000,000 $500,000 $4,500,000 $300,000 a) What is Brando Division's return on investment? Be sure to show your work! b) What is Brando Division's residual income? Be sure to show your work! c) Which is a better measure (ROI or residual income) to evaluate a Division's performance (Please note that you will need to research the advantages and disadvantages of ROI vs Residual Income. This question is not an opinion question.)
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