Question: Use the information in Brief Exercise 25.2 to compute the ROI for the Pennsylvania factory using total assets and assets net of depreciation. Now find

Use the information in Brief Exercise 25.2 to compute the ROI for the Pennsylvania factory using total assets and assets net of depreciation. Now find residual income if the company expects an 18 percent return on total assets. Is the Pennsylvania factory performing up to management's expectations?

Year 2

Sales.............................$1,000,000

Operating expenses..........640,000

Total assts......................2,200,000

Accumulated depreciation..220,000

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