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Business, 29.04.2021 18:40 heroxtree

The New Products Division, of Testar Company had operating income of $9,800,000 and operating assets of $46,600,000 during the current year. The New Products Division has developed a potential new product that would require $10,300,000 in operating assets and would be expected to provide $3,200,000 in operating income each year. Testar has set a target return on investment (ROI) of 22% for each of its divisions. Assuming that the new product is put into production, calculate the residual income for the division.

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The New Products Division, of Testar Company had operating income of $9,800,000 and operating assets...
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