Alexander Bruce and Jonathon Wayne are managers of two product lines for Gotham Incorporated.One of them is a candidate for promotion based on performance.Using the following data:
a.Calculate the residual income (assume a target income of 10% return on assets)and the investment center return on assets.
b.Indicate which manager should be recommended for promotion and why.
$\begin{array}{lrr}
& \underline { \text { Bruce }} & \underline { \text { Wayne } } \
\text { Revenue } & \$ 205,000 & \$ 270,000 \
\text { Costs } & 189,000 & 232,000 \
\text { Average assets } & 300,000 & 290,000
\end{array}$

Question

Alexander Bruce and Jonathon Wayne are managers of two product lines for Gotham Incorporated.One of them is a candidate for promotion based on performance.Using the following data:
a.Calculate the residual income (assume a target income of 10% return on assets)and the investment center return on assets.
b.Indicate which manager should be recommended for promotion and why.
 $\begin{array}{lrr}
& \underline { \text { Bruce }} & \underline { \text { Wayne } } \
\text { Revenue } & \$ 205,000 & \$ 270,000 \
\text { Costs } & 189,000 & 232,000 \
\text { Average assets } & 300,000 & 290,000
\end{array}$

Quizplus · Accepted Answer

The Answer of Alexander Bruce and Jonathon Wayne are managers of two product lines for Gotham Incorporated.One of them is a candidate for promotion based on performance.Using the following data:
a.Calculate the residual income (assume a target income of 10% return on assets)and the investment center return on assets.
b.Indicate which manager should be recommended for promotion and why.
 $\begin{array}{lrr}
& \underline { \text { Bruce }} & \underline { \text { Wayne } } \
\text { Revenue } & \$ 205,000 & \$ 270,000 \
\text { Costs } & 189,000 & 232,000 \
\text { Average assets } & 300,000 & 290,000
\end{array}$

Alexander Bruce and Jonathon Wayne Are Managers of Two Product