Selected data from an investment center of IROL Inc. follow:Sales $8,000,000Net book value of assets, beginning 2,500,000Net book value of assets, ending 2,600,000Net operating income 640,000Minimum rate of return 12%Required1. Calculate return on sales (ROS), asset turnover (AT), and return on investment (ROI).2. Calculate residual income (RI).

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...
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Selected data from an investment center of IROL Inc. follow:
Sales $8,000,000
Net book value of assets, beginning 2,500,000
Net book value of assets, ending 2,600,000
Net operating income 640,000
Minimum rate of return 12%
Required
1. Calculate return on sales (ROS), asset turnover (AT), and return on investment (ROI).
2. Calculate residual income (RI).

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