The following information pertains to VI Division, which has $1,400,000 in investments. Division sales revenue $900,000 Less

Question:

The following information pertains to VI Division, which has $1,400,000 in investments.
Division sales revenue $900,000
Less division expenses 480,000
Division income $420,000
The company’s is 10%.
Required
(a) What is the division’s return on investment?
(b) What is the division’s residual income?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...