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 data below,
(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.
Correct Answer:
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RI
Bruce: RI = $16,000 - (.10)($...
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