Residual Income
The Tuxedo Division of Shamus O'Toole Company had operating income last year of $152,250,000 and average operating assets of $2,175,000,000. O'Toole's minimum acceptable rate of return is 8%.
Required:
Enter negative values as negative numbers.
1. Calculate the residual income for the Tuxedo Division.
2. Was the ROI for the Tuxedo Division greater than, less than, or equal to 8%?
- Less than 8%
- Greater than 8%
- Less than 8%
- Equal to 8%