Which division has the best return on investment and which division has the best residual income figure, respectively

ACCOUNTING

Multiple Choice

The Bandage Medical Supply Company has two divisions that operate independently of one another. The financial data for the year 20x3 reported the following results:


North South

Sales $3,000,000 $2,500,000

Operating income 750,000 550,000

Taxable income 650,000 375,000

Investment 6,000,000 5,000,000


The company's desired rate of return is 10%. Income is defined as operating income.


Which division has the best return on investment and which division has the best residual income figure, respectively?

a. North, North

b. South, South

c. North, South

d. South, North

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