Lindsey 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:

View the data.

Lindsey Sports Company$|$stanagement has specified a $160$rget 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$).$

Residual income $=$

The RI for the Snow Sports division $=$

The RI for the Non$-$snow Sports division $=$

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