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Question
8)
Mega mart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).
Investment Center Sales Net
Income Average
Invested Assets
Electronics $ 10,800,000 $ 409,500 $ 3,150,000
Sporting goods 7,600,000 1,044,000 5,800,000
1-a.
Compute return on investment for each department.
b.
Assume a target income level of 11.2% of average invested assets. Compute residual income for each department.
