Exercise 9-2 Residual Income [LO9-2]

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 $490,000 on sales of $1,200,000. The companys average operating assets for the year were $1,400,000 and its minimum required rate of return was 15%.

Required:

Compute the companys residual income for the year.