ROI and residual income The Central Division of National Inc., has operating income of $16000 on sales revenue of $160000. Divisional operating assets are $80,000 and management of National has determined that a minimum return of 12% should be expected from all investments.
Required:
a. Using the DuPont model, calculate The Central Division's margin, turnover, and ROI."
b. Calculate the Central Division's residual income.