Alexander Bruce and Jonathon Wayne Are Managers of Two Product

question 83

Essay

Alexander Bruce and Jonathon Wayne are managers of two product lines for Gotham Incorporated.One of them is a candidate for promotion based on performance.Using the following data:
a.Calculate the residual income (assume a target income of 10% return on assets)and the investment center return on assets.
b.Indicate which manager should be recommended for promotion and why.
$\begin{array}{lrr}&\text { Bruce }&\text { Wayne }\\ \text { Revenue } & \$ 205,000 & \$ 270,000 \\\text { Costs } & 189,000 & 232,000 \\\text { Average assets } & 300,000 & 290,000\end{array}$

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