Question - Kraft Foods Group reports the following for two of its divisions for a recent year. All numbers are in millions of dollars.
|
($ millions)
|
Beverage Division
|
Cheese Division
|
|
Invested assets, beginning
|
$2,860
|
$4,930
|
|
Invested assets, ending
|
2,950
|
5,150
|
|
Sales
|
3,081
|
5,245
|
|
Operating income
|
389
|
694
|
Assume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division.