As the Staff Accountant for Investment Centers Beta and Gamma

question 98

Essay

As the staff accountant for Investment Centers Beta and Gamma, compute the residual income for each investment center, using the following information:
$\begin{array}{lrr} & \text { Beta } & \text { Gamma } \\\text { Operating income } & \$ 850,000 & \$ 1,000,000 \\\text { Actual ROI } & 28 \% & 49 \% \\\text { Desired ROI } & 32 \% & 35 \% \\\text { Assets invested } & \$ 585,000 & \$ 750,000 \\\hline\end{array}$

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