Far Sight is a division of a major corporation. The following data are for the latest year of operations: Required: a. What is the division's return on investment (ROI)? b. What is the division's residual income?

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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Far Sight is a division of a major corporation. The following data are for the latest year of operations:

Required:

a. What is the division's return on investment (ROI)?
b. What is the division's residual income? 

Sales 24,480,000
Net operating income 1.738.000
average operating assets 6,000
rate of return 16%
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