Wheeler Company provided the following selected information about its consumer products division for 2012: $$\begin{array} { l c }
\text { Desired ROI } & 10 \% \
\text { Net Income } & \$ 140,000 \
\text { Residual Income } & \$ 100,000
\end{array}$$
a) Based on this information, what was the division's investment amount (amount of operating assets)?
b) Based on residual income, did the division meet the target set by Wheeler?

Question

Wheeler Company provided the following selected information about its consumer products division for 2012: $$\begin{array} { l c } 
\text { Desired ROI } & 10 \% \
\text { Net Income } & \$ 140,000 \
\text { Residual Income } & \$ 100,000
\end{array}$$ 
a) Based on this information, what was the division's investment amount (amount of operating assets)?
b) Based on residual income, did the division meet the target set by Wheeler?

Quizplus · Accepted Answer

The Answer of Wheeler Company provided the following selected information about its consumer products division for 2012: $$\begin{array} { l c } 
\text { Desired ROI } & 10 \% \
\text { Net Income } & \$ 140,000 \
\text { Residual Income } & \$ 100,000
\end{array}$$ 
a) Based on this information, what was the division's investment amount (amount of operating assets)?
b) Based on residual income, did the division meet the target set by Wheeler?