Question - Westerville Golf Co. specializes in managing and developing golf course communities in Ohio and surrounding states.
In the most recent year, the company had net operating income of $1,750,000 on sales of $8,000,000. The company's average operating assets for the year were $10,000,000 and its minimum rate of return is 16%.
Ignore the impact of income taxes in your calculation. Compute the company's residual income for the year.