Howard Company provided the following selected information about its consumer products division for the current year: $\begin{array}{lr}
\text { Desired ROI } & 12\% \
\text { Operating income } & \$ 204,800 \
\text { Residual income } & \$ 64,800
\end{array}$ Based on this information, the division's investment amount was:
A) $1,706,667.
B) $1,166,667.
C) $540,000.
D) $2,873,333.

Question

Quizplus · Accepted Answer

The investment amount can be calculated by adding the beginning and ending balances and dividing by two: ($1,000,000 + $1,333,333) / 2 = $1,166,667.