Mahim Products has a division that generated $10 000 000 in sales and operating income of $1 700 000 on average operating assets of $6 000 000.The company's management team expects division managers to generate sufficient income to guarantee a minimum return of 30 per cent.
Required:
A. What is the division's residual income?
B. What is the division's return on investment (ROI)?

Question

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The Answer of Mahim Products has a division that generated $10 000 000 in sales and operating income of $1 700 000 on average operating assets of $6 000 000.The company's management team expects division managers to generate sufficient income to guarantee a minimum return of 30 per cent.
Required:
A. What is the division's residual income?
B. What is the division's return on investment (ROI)?

Mahim Products Has a Division That Generated $10 000 000