question archive Question 2 [30 points) A company has two divisions
Question 2 [30 points) A company has two divisions
Subject:BusinessPrice: Bought3
Question 2 [30 points) A company has two divisions. Small and Big. Big Division has net assets of 48 million, and makes an annual profit of N900,000. Small Division has net assets of 400.000 and makes an annual profit of N90,000. The cost of capital for both divisions is 10% and 80% of profits are controllable. Required: Compare the performance of the two divisions using: g) ROI b) Residual income c) Comment on your results d) Explain the levels of autonomy/authority in divisionalized organisations e) State the advantages of divisionalization
