Malta Ltd, from exercise 25.9, requires a minimum return on investment of 16%.

Required

(a) Calculate the residual profit for the Phone Screen and the Computer Screen divisions of Malta Ltd using the data from Exercise 25.9

Exercise 25.9

Phone Screens and Computer Screens are two divisions operated as investment centres of Malta Ltd. Management wants to know which of the two earned the highest return on investment for the year ended 30 June 2026. The details for each division for the year ended 30 June 2026 were as follows.

Transcribed Image Text:

Sales revenue Interest expense Profit before tax Phone Screens $2 000 000 40 000 240 000 1 000 000 Assets 1 July 2025 Assets 30 June 2026 1 500 000 Computer Screens $2 500 000 80 000 360 000 1 800 000 1 600 000