Montana Company has reported the following results for last year's operations:
|
Sales
|
$50,000,000
|
|
Net operating income
|
6,000,000
|
|
Average operating assets
|
20,000,000
|
Required:
a) Compute Montana's margin, turnover, and ROI
b) Management has set a minimum required rate of return on average operating assets of 25%. What is the residual income for the year?