Far Sight is a division of a major corporation. The following data are for the latest year of operations: Sales $24,480,000 Net operating Income $1,738,080 Average operating assets $6,000,000 The company’s minimum required rate of return 16% Required: a. What is the division's return on investment (ROI)? b. What is the division's residual income?
Far Sight is a division of a major corporation. The following data are for the latest year of operations: Sales $24,480,000 Net operating Income $1,738,080 Average operating assets $6,000,000 The company’s minimum required rate of return 16% Required: a. What is the division's return on investment (ROI)? b. What is the division's residual income?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...
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Far Sight is a division of a major corporation. The following data are for the latest year of operations:
Sales |
$24,480,000 |
Net operating Income |
$1,738,080 |
Average operating assets |
$6,000,000 |
The company’s minimum required |
16% |
Required:
a. What is the division's
b. What is the division's residual income?
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