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acc notes 3-2 - 20 on these assets-In the current period...

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1. ROI=Earnings/I= Earnings/Sales x Sales/Investment 30/500= 6% x 500/200 = $2.5 Regal Company reports the following: Earnings- 30,000 Sales- 500,000 Total Investment- 200,000 ROI= 30/200= 15 2. RI= Earnings – r(I) - A division has average operating assets of $100,000 and is required to earn a return of
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Unformatted text preview: 20% on these assets. -In the current period the division earns $30,000 What is the residual income? =30 - .20(100)= $10 K RI >0...
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