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A food manufacturer reports the following for two of its divisions for a recent year. ($ millions) Beverage Division Cheese Division Invested assets, beginning $
A food manufacturer reports the following for two of its divisions for a recent year.
($ millions) | Beverage Division | Cheese Division | |||||
Invested assets, beginning | $ | 2,668 | $ | 4,461 | |||
Invested assets, ending | 2,596 | 4,403 | |||||
Sales | 2,684 | 3,928 | |||||
Operating income | 352 | 637 | |||||
Assume that each of the companys divisions has a required rate of return of 7%. Compute residual income for each division. (Enter your answers in millions.)
Assume that each of the company's divisions has a required rate of return of 7%. Compute residual income for each division. (Enter your answers in millions.) ($ millions) Beverage Cheese Targeted return Target income Residual Income Beverage Cheese Residual income
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