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Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 20%and
Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is
20%and the weighted average cost of capital is10%.
Its effective tax rate is 30%.
| Sales | $8,000,000 |
| Operating income | 3,600,000 |
| Total assets | 3,500,000 |
| Current liabilities | 760,000 |
What is the division's Residual Income (RI)?
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