Calculate ROI,residual Income,and EVA for Each of the Investment Centers

question 53

Essay

Calculate ROI,residual income,and EVA for each of the investment centers listed.(Round to two decimal places.)
$$\begin{array} { l r r } & \text { Investment Center 1 } & \text { Investment Center 2 } \\\text { Operating income } & \$ 50,000 & \$ 7,000 \\\text { Assets invested } & 125,000 & 180,000 \\\text { Income taxes } & 15,000 & 21,000 \\\text { Cost of capital in dollars } & 13,000 & 25,000 \\\text { Desired ROI } & 56 \% & 48 \%\end{array}$$

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Definitions:

Purely Competitive

This describes a market structure where many firms sell identical products, and no single seller can influence the market price.

Purely Competitive

A purely competitive market is characterized by numerous sellers and buyers engaging in the exchange of homogenous goods or services, with no single entity able to influence market prices.

Market Price

The current market rate at which services or goods are offered for sale or purchase.

Cost Data

Information related to the expenses involved in producing a good or providing a service, used for pricing, budgeting, and financial analysis.