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(c) The following information is available on Twin Ts Company: 2018 (RM) 2019 (RM) Sales 900,000 850,000 Net operating income 36,000 45,000 Shareholders' equity 100,000
(c) The following information is available on Twin Ts Company: 2018 (RM) 2019 (RM) Sales 900,000 850,000 Net operating income 36,000 45,000 Shareholders' equity 100,000 100,000 Average operating assets 180,000 200,000 Minimum required rate of return 15% 15% Required: (i) Compute the residual income for 2018 and 2019. (6 marks) Compute the return on investment for 2018 and 2019. (6 marks) Provide your comment on the performance of Twin Ts Company based on your computations in (i) and (ii) above. (4 marks)
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