EXERCISE $9-2$ Residual Income $[$LO$9-2]$

Juniper Design Ltd$.$ of Manchester, England, is a company specializing in providing design services to

residential developers. Last year the company had net operating income of $$600,000$ on sales of $$3,000,000.$

The company's average operating assets for the year were $$2,800,000$ and its minimum required rate of

return was $18\%.$

Required:

Compute the company's residual income for the year.