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average total assets Operating income Return on investment (ROI) quired: Mortgage Loans $ 2,900 $ 609 21.00% Consumer Loans $ 16,750 $ 2,345 14.008

average total assets Operating income Return on investment (ROI) quired: Mortgage Loans $ 2,900 $ 609 21.00% Consumer Loans $ 16,750 $ 2,345 14.008

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting 

Consider the following data (in millions) from Trident Financial Incorporated, which has two main divisions, mortgage loans and consumer loans: Average total assets Operating income Return on investment (ROI) Required: 1. Based on ROI, which division is more successful? Mortgage loans Consumer loans (a) 10% (b) 15% (c) 20% 2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for each division if the minimum desired rate of return is (a) 10%, (b) 15%, and (c) 20%? (Leave no cells blank. Negative amounts should be indicated by a minus sign. Enter your answers in millions.) Residual Income (RI) Mortgage Loans Mortgage Loans $ 2,900 $ 609 21.00% Consumer Loans Consumer Loans $ 16,750 $ 2,345 14.00%
Transcribed Image Text:Consider the following data (in millions) from Trident Financial Incorporated, which has two main divisions, mortgage loans and consumer loans: Average total assets Operating income Return on investment (ROI) Required: 1. Based on ROI, which division is more successful? Mortgage loans Consumer loans (a) 10% (b) 15% (c) 20% 2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for each division if the minimum desired rate of return is (a) 10%, (b) 15%, and (c) 20%? (Leave no cells blank. Negative amounts should be indicated by a minus sign. Enter your answers in millions.) Residual Income (RI) Mortgage Loans Mortgage Loans $ 2,900 $ 609 21.00% Consumer Loans Consumer Loans $ 16,750 $ 2,345 14.00%
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