Problem

Comparing the Performance of Two Divisions (LO 2, 4)Long Beach Pharmaceutical Company has...

Comparing the Performance of Two Divisions (LO 2, 4)

Long Beach Pharmaceutical Company has two divisions, which reported the following results for the most recent year.

 

Division I

Division II

Income

$ 900,000

$ 200,000

Average invested capital

$6,000,000

$1,000,000

ROI

15%

20%

Required: Which was the more successful division during the year? Think carefully about this, and explain your answer.

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