42) Household Brands Inc.

Household Brands Inc. (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies. HBI is now, in 2020, comprised ofthree divisions: cosmetics, household. and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets ofthe company overthe last three years: Revenue Operating Income Assets Cosmetics 2618 $25,966 $2, 666 $ 9,866 2619 23, 266 2, 666 16, 266 2929 21, 599 1, 866 9, 566 Household 2618 15,299 1, 399 7, 286 2619 15, 366 766 7,946 2626 14, 366 896 6, 286 Electronics 2918 15,299 1,999 4,636 2619 9, 586 966 4, 396 2929 8,616 1,319 4,219 Household Brands Total 2918 55,399 4,999 21,719 2919 48,989 4, 299 22, 539 2929 44,419 4,999 29,959 The current compensation package is an annual bonus award. The senior executives share in the bonus pool, The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets, Round all calculations to two significant digits. Return on sales in the household division in 20i9 is (rounded)