Chapter 11: Applying Excel: Exercise (Part 2 of 2)

Requirement 2:

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Chapter 11: Applying Excel
Data
Sales	$45,000,000
Net operating income	$4,500,000
Average operating assets	$15,000,000
Minumum required rate of return	21%

Revise the data in your worksheet as follows:

If your formulas are correct, you should get the correct answers to the following questions.

a. What is the ROI?

b. What is the residual income? (Negative amount should be indicated by a minus sign.)

c. Why is the residual income positive?