Question
CDM Corporation has multiple segments. Segment 1 has sales of $3,000,000, net operating income of $80,000, and average operating assets of $1,000,000. The company's minimum
CDM Corporation has multiple segments. Segment 1 has sales of $3,000,000, net operating income of $80,000, and average operating assets of $1,000,000. The company's minimum required rate of return is 6%.
What is the Return on Investment (ROI) for the segment? %
What is the residual income of the segment? $
The segment reduces its average operating assets to $800,000, which lowers its net operating income to $64,000.
What is the new Return on Investment (ROI) for the segment? %
What is the new residual income for the segment? $
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
1259307417, 978-1260153132, 1260153134, 978-1259307416
