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Shannon Pharmaceuticals has the following information available for one of its divisions in the current year: Salesrevenue$10 000 000 Average operatingassets4 000 000 Return on

Shannon Pharmaceuticals has the following information available for one of its divisions in the current year:

Salesrevenue$10 000 000 Average operatingassets4 000 000 Return on investment(ROI)40%

The company requires each of its divisions to generate a minimum return of 30 per cent. What is this divisions residual income?

$450 000

$700 000

$400 000

$600 000

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