ROI and Residual Income: Basic Computations Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10 percent with a 30 percent tax rate. Selected operating data for three divisions of the company follow.

Sales	$1,200,000	$780,000	$900,000
Operating assets	600,000	260,000	330,000
Net operating income	101,000	60,000	62,000

Compute the residual income for each division. (FILL IN THE BLANKS)

Net operating income	$101,000	$60,000	$62,000
Minimum level	__________	__________	__________
Residual income	$__________	$__________	$__________