The New York division of Ram Co. had the following financial data for 2020: sales $600,000, average operating assets $200,000, margin (or profit margin) 5%, minimum required rate of return 12%. 1. What was the return on investment for the division? a)10% b)7% c)15% d)12% 2. What was the dollar amount of residual income for the division? a)$6,000 b)$8,000 c)$12,000 d)$16,000
The New York division of Ram Co. had the following financial data for 2020: sales $600,000, average operating assets $200,000, margin (or profit margin) 5%, minimum required rate of return 12%. 1. What was the return on investment for the division? a)10% b)7% c)15% d)12% 2. What was the dollar amount of residual income for the division? a)$6,000 b)$8,000 c)$12,000 d)$16,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The New York division of Ram Co. had the following financial data for 2020: sales $600,000, average operating assets $200,000, margin (or profit margin) 5%, minimum required
1. What was the
a)10%
b)7%
c)15%
d)12%
2. What was the dollar amount of residual income for the division?
a)$6,000
b)$8,000
c)$12,000
d)$16,000
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