Essay
The following information relates to the operating performance of two divisions of Sound Machine,Inc. ,for last year.
Required:
a.Compute the return on investment (ROI)of each division,using total assets at gross book value as the investment base.
b.Compute the ROI of each division,using total assets net of accumulated depreciation (net book value)as the investment base.
c.Which of the two measures do you think gives the better indication of operating performance? Explain your reasoning.
Correct Answer:
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a.U.S.Division: $6,000,000/$24,000,000 =...View Answer
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Correct Answer:
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