Driver Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and inline skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-snow Sports. The following divisional information is available for the past year: B (Click the icon to view the information.) Driver's management has specified a 14% target rate of return. Compute each division's RI. Interpret your results. Are your results consistent with each division's ROI? First, select the formula to calculate residual income (RI). 11 RI The Rl for the Snow Sports division is The Rl for the Non-snow Sports division is Both divisions have residual income. This means that the divisions are earning income at a rate that management's minimum expectations. Are your results consistent with each division's ROI? This result is with the ROI calculations. Data Table Snow Sports Non-snow Sports Net Sales Operating Average Total Revenue Income Assets ROI $ 5,300,000 $ 901,000 $ 4,500,000 20 % 8,500,000 1,445,000 6,400,000 22.6 % Print Done