Question :
Consider that next year Research in Motion sells off its interest in TIP Communications (one of its subsidiaries). Forecasted information about the operations for TIP and RIM for that future fiscal year instantly prior to the proposed sale follows:
$millions RIM TIP Total
Revenues $20,943 $1,727 22.670
Operationing expenses 20,321 1,971 22,292
*Does not include TIP results. Includes cost of goods sold
Required:
1. Evaluate operating income for RIM and TIP, discretely, and the net operating income for both.
2. If the results in part 1 for TIP is typical, why do you consider RIM decided to sell off its interest in TIP?