![]() ![]() ![]() William Abraham, the new car division manager, argues that the performance parts division has "loaded up on a lot of short-term debt" to boost its RI. Calculate residual income (RI) for each division using operating income as a measure of income and total assets minus current liabilities as a measure of investment. Calculate return on investment (ROI) for each division using operating income as a measure of income and total assets as a measure of investment.Some division financial measures for 2017 are as follows: Performance Auto Company operates a new car division (that sells high-performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). ![]()
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