Shannon Pharmaceuticals has the following information available for one of its divisions in the current year:
Sales revenue $10 000 000
Average operating assets 4 000 000
Return on investment (ROI) 40%
The company requires each of its divisions to generate a minimum return of 30 per cent. What is this division's residual income?
- $450 000
- $600 000
- $400 000
- $700 000