Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year: Small AppliancesDivision Cleaning ProductsDivision Sales $34,670,000 $31,320,000 Operating income 2,773,600 1,252,800 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Forchen, Inc., requires an 8 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 1 2. Calculate residual income for the Cleaning Products Divi $ fill in the blank 2
Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year: Small AppliancesDivision Cleaning ProductsDivision Sales $34,670,000 $31,320,000 Operating income 2,773,600 1,252,800 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Forchen, Inc., requires an 8 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 1 2. Calculate residual income for the Cleaning Products Divi $ fill in the blank 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Calculating Residual Income
Forchen, Inc., provided the following information for two of its divisions for last year:
| Small Appliances Division |
Cleaning Products Division |
|
| Sales | $34,670,000 | $31,320,000 |
| Operating income | 2,773,600 | 1,252,800 |
| Operating assets, January 1 | 6,394,000 | 5,600,000 |
| Operating assets, December 31 | 7,474,000 | 6,000,000 |
Forchen, Inc., requires an 8 percent minimum
Required:
1. Calculate residual income for the Small Appliances Division.
$ fill in the blank 1
2. Calculate residual income for the Cleaning Products Divi
$ fill in the blank 2
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