The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results: North South Sales $3,720,000 $3,220,000 Operating income 930,000 730,000 Taxable income 785,000 510,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. North: Answer South: Answer b. What are the respective residual incomes of the North and South divisions? North: Answer South: Answer c. Which division has the better return on investment and which division has the better residual income figure? Return on investment: Answer Residual Income: Answer
The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results:
| North | South | ||
|---|---|---|---|
| Sales | $3,720,000 | $3,220,000 | |
| Operating income | 930,000 | 730,000 | |
| Taxable income | 785,000 | 510,000 | |
| Investment | 6,000,000 | 5,000,000 |
The company's desired
a. What are the respective return-on-investment ratios for the North and South divisions?
Round ROI to the nearest whole percentage.
North: Answer
South: Answer
b. What are the respective residual incomes of the North and South divisions?
North: Answer
South: Answer
c. Which division has the better
Return on investment: Answer
Residual Income: Answer
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