題組內容

五、15%
The following data pertain to the Western Division of Global Company:

The company uses responsibility accounting concepts when evaluating performance； Western’s Division manager is contemplating the following three investments. He can invest up to $450,000.
Required:

4. If Global has an imputed interest charge of 23%, compute the residual income of investment No. 3. If Western’s Division manager is evaluated by residual income, is this investment attractive from Western’s perspective? From Global’s perspective? Why?

題組內容

4. If Global has an imputed interest charge of 23%, compute the residual income of investment No. 3. If Western’s Division manager is evaluated by residual income, is this investment attractive from Western’s perspective? From Global’s perspective? Why?

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