The company requires each of its divisions to generate a


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

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Software Engineering: The company requires each of its divisions to generate a
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