Exercise 10-2 Residual Income [LO10-2] Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $450,000 on sales of $1,000,000. The companys average operating assets for the year were $1,200,000 and its minimum required rate of return was 14%.

Required: Compute the companys residual income for the year.