Milano corporation has three operating divisions and, Ask an Expert

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problem: Milano Corporation has three operating divisions and requires a 12 percent return on all investments. Selected information is presented here:

Divison A Division B Division C

Revenues $500,000

Operating Income $60,000 $80,000

Operating Assets $250,000 $600,000

Margin 12%

Turnover 1 turn 2 turns

ROI

Residual Income $20,000

Required:

[A] Compute the missing amounts for each division

[B] Make comment on the relative performance of each division

[C] Give some ex to show how residual income improves decision making at the divisional level

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M919921

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