Batman Abstract Company has three divisions that operate autonomously. Their results for 2015 are as follows:
The company's desired rate of return is 20%.
Required:
a.Compute each division's ROI.
b.Compute each division's residual income.
c.Rank each division by both ROI and residual income.
d.Which division had the best performance in 2015? Why?
Definitions:
M2
A classification of money supply that includes cash, checking deposits, and easily convertible near money like savings deposits, money market securities, and mutual funds.
Money Supply
The total financial assets existing in an economy at a specific period, incorporating cash, coins, and the balances maintained in checking and savings accounts.
Banking System
The structure of banks and financial institutions within an economy, which provides financial services including deposits, loans, and currency exchange.
M2
A measure of the money supply that includes cash, checking deposits, and easily convertible near money.
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