Answer the Following Questions Using the Information Below:
Care Inc

question 18

Multiple Choice

Answer the following questions using the information below:
Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results:
$$\begin{array} { l r r } & \text { North } & \text { South } \\\text { Sales } & \$ 6,000,000 & \$ 5,000,000 \\\text { Operating income } & 1,500,000 & 1,200,000 \\\text { Taxable income } & 1,200,000 & 700,000 \\\text { Investment } & 14,000,000 & 10,000,000\end{array}$$ 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?

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Definitions:

Water Soluble

Characteristic of a substance that can be dissolved in water.

Vitamin

Organic compounds required in small quantities for essential metabolic reactions in living organisms.

Stored

When referring to a general term, it means to put away or accumulate for future use.

Bile

A digestive fluid produced by the liver, stored in the gallbladder, and secreted into the small intestine to aid in the digestion and absorption of fats.