Problem
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $460,000 on sales of $2,000,000. The company's average operating assets for the year were $2, 200,000 and its minimum required rate of return was 16%.
Compute the company's residual income for the year.
Average operating assets
Net operating income
Minimum required return
Residual income.