Question
Consider the following data (in millions) from Trident Financial, Inc., which has two main divisions, mortgage loans and consumer loans: Mortgage Loans Consumer Loans Average
Consider the following data (in millions) from Trident Financial, Inc., which has two main divisions, mortgage loans and consumer loans:
| Mortgage Loans | Consumer Loans | |||||
| Average total assets | $ | 2,300 | $ | 18,750 | ||
| Operating income | $ | 483 | $ | 2,250 | ||
| Return on investment (ROI) | 21.00 | % | 12.00 | % | ||
| 2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for each division if the minimum desired rate of return is: (a) 10%, (b) 15%, and (c) 20%? (Leave no cells blank. Enter "0" wherever required. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in millions, rounded to nearest whole number.) | ||||||
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