Bknight trading has two divisions

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Reference no: EM13936537

BKnight Trading has two divisions, Penang and Ipoh, whose performance are under evaluation.

Penang Division: Profit in a year RM87,500, Net assets RM375,000

Ipoh Division: Profit in a year RM175,000, Net assets RM812,500

Bknight has a cost of capital of 15%.

Required: a) Calculate the return on investment and residual income figures for the two divisions under review and comment on your results.

b) Which method of performance evaluation will be more useful when comparing performance? Why?

c) List three (3) aspects of performance measures that would be appropriate for an auditing firm.

Reference no: EM13936537

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