Selected data from one of the investment centers from Jones Company are as follows:
$$\begin{array} { | l | r | }
\hline \text { Sales } & \$ 400,000 \
\hline \text { Average divisional assets } & \$ 320,000 \
\hline \text { Divisional operating income } & \$ 40,000 \
\hline \text { Minimum rate of return } & 11 \% \
\hline
\end{array}$$ Required:
1.Calculate return on investment (ROI), including each of the two component measures of ROI.
2.Calculate residual income (RI).

Question

Selected data from one of the investment centers from Jones Company are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Sales } & \$ 400,000 \
\hline \text { Average divisional assets } & \$ 320,000 \
\hline \text { Divisional operating income } & \$ 40,000 \
\hline \text { Minimum rate of return } & 11 \% \
\hline
\end{array}$$ Required:
1.Calculate return on investment (ROI), including each of the two component measures of ROI.
2.Calculate residual income (RI).

Quizplus · Accepted Answer

The Answer of Selected data from one of the investment centers from Jones Company are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Sales } & \$ 400,000 \
\hline \text { Average divisional assets } & \$ 320,000 \
\hline \text { Divisional operating income } & \$ 40,000 \
\hline \text { Minimum rate of return } & 11 \% \
\hline
\end{array}$$ Required:
1.Calculate return on investment (ROI), including each of the two component measures of ROI.
2.Calculate residual income (RI).

Selected Data from One of the Investment Centers from Jones