Ex 9-13

A food manufacturer reports the following for two of its divisions for a recent year. ($ millions) Invested assets, beginning Invested assets, ending Sales Operating income Beverage Division $2,642 1,958 2,681 349 Cheese Division $4,456 4,394 3,925 634 Assume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division. (Enter your answers in millions; for example, $500,000,000 should be entered as $500.) Beverage Cheese ($ millions) Average assets Targeted return Target income Beverage Cheese Residual Income ($ millions) Operating income Less: Target income Residual income