The Tuxedo Division of Shamus O’Toole Company had operating income last year of $ 340,000 and average operating assets of $ 3,500,000. O’Toole’s minimum acceptable rate of return is 7 percent. (Round all answers to two decimal places.)
1. Calculate the residual income for the Tuxedo Division.
2. Was the ROI for the Tuxedo Division greater than, less than, or equal to 7 percent?