# ROI = \$18,000/\$100,000 = 18% The return on the investment exceeds the minimum required rate of return. Redmond Awnings, a division of Wrapup Corp.

ROI = \$18,000/\$100,000 = 18% The return on the investment exceeds the minimum required rate of return. Redmond Awnings, a division of Wrapup Corp., has a net operating income of \$60,000 and average operating assets of \$300,000. The required rate of return for the company is 15%. What is the division”s residual income? Redmond Awnings, a division of Wrapup Corp., has a net operating income of \$60,000 and average operating assets of \$300,000. The required rate of return for the company is 15%. What is the division”s residual income? If the manager of the Redmond Awnings division is evaluated based on residual income, will she want to make an investment of \$100,000 that would generate additional net operating income of \$18,000 per year? If the manager of the Redmond Awnings division is evaluated based on residual income, will she want to make an investment of \$100,000 that would generate additional net operating income of \$18,000 per year?

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