Calculate the residual income assume a target income of 10

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Alex and john are managers of two product lines for company. One of them is a candidate for promotion based on performance. Using the following data"

  1. Calculate the residual income (assume a target income of 10% return on assets) and the investment center return on assets.
  2. Indicate which manager should be recommended for promotion and why.

Alex                       john     

Revenue                $205       $270

Costs                     189         232

Average assets      300         290

Reference no: EM13568635

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