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For 2012, the New Products Division, of Testar Company, had operating income of $9,600,000 and operating assets of $46,400,000. The New Products Division has

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For 2012, the New Products Division, of Testar Company, had operating income of $9,600,000 and operating assets of $46,400,000. The New Products Division has developed a potential new product that would require $10,100,000 in operating assets and would be expected to provide $3,000,000 in operating income each year. Testar has set a target return on investment (ROI) of 21% for each of its divisions. Assuming that the new product is put into production, calculate the residual income for the division. Multiple Choice $2,265,000 $695,000 $735,000 $535,000 A Cr

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