Refer to the information in Exercise 22-12. Assume that each of the company’s divisions has a required rate of return of 7%. Compute residual income for each division.

Data From Exercise 22-12

A food manufacturer reports the following for two of its divisions for a recent year.

For each division, compute (1) return on investment, (2) profit margin, and (3) investment turnover for the
year. Round answers to two decimal places.

Transcribed Image Text:

$ millions Beverage Division Cheese Division Invested assets, beginning $2,662 $4,455 Invested assets, ending.. 2,593 4,400 Sales..... 2,681 3,925 Operating income.... 349 634