ROI and Residual Income Example:

"I know headquarters wants us to add that new product line," said Aditi Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our return on investment $($ROI$)$ has led the company for three years, and I don't want any letdown."

Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year$-$end bonuses given to the divisional managers who have the highest ROIs. Operating results for the company's Office Products Division for this year are given below.

$\backslash$table$[[$Sales$,,$$$10,000,000$