Sea Cruise Equipment Company Has Several Divisions That Are Investment

question 156

True/False

Sea Cruise Equipment Company has several divisions that are investment centers. Data for the Boat Division and the Trailer Division are shown here:
$$\begin{array} { | l | r | r | } \hline & \text { Boat Division } & \text { Trailer Division } \\\hline \text { Operating income } & \$ 70,000 & \$ 42,000 \\\hline \text { Total assets at Jan. 1 } & \$ 692,000 & \$ 233,000 \\\hline \text { Total assets at Dec. 31 } & \$ 700,000 & \$ 218,000 \\\hline\end{array}$$ With regard to the efficient use of assets, the Boat Division has a higher return on investment (ROI) because it has the highest operating income.

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