Michigan Company
Ann Arbor Division of the Michigan Company Has

Multiple Choice

Michigan Company
Ann Arbor Division of the Michigan Company has the following statistics for its most recent operations:
$\begin{array}{ll}\text { Assets available for use (Market Value) } & \$ 3,600,00 \\\text { Assets available for use (Book Value) } & \$ 2,000,00 \\\text { Am Arbor Division's return on investment } & 25 \% \\\text { Am Arbor Division's residual income } & 200,000 \\\text { Return on investment (entire Michigan Company) } & 20 \%\end{array}$

Refer to Michigan Company.What is the target rate of return in Michigan Company?

A) 25%
B) 20%
C) 15%
D) 10%