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Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year:
Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year:
| Retail Division | Wholesale Division | ||||||
| Operating income | $ | 2,500,000 | $ | 6,000,000 | |||
| Operating assets | $ | 16,000,000 | $ | 36,000,000 | |||
Terra Company has set a target return on investment (ROI) of 15% for both divisions Which of the following statements is accurate?
A. Residual income for the wholesale sales division was $100,000
B. Residual income for the wholesale sales division was $600,000
C. Residual income for the retail sales division was $600,000
D. None of these.
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