Question
the bedding division of homestore corporation had sales of $8500000 and operating income of $893000 last year. the total assets of the bedding division were
the bedding division of homestore corporation had sales of $8500000 and operating income of $893000 last year. the total assets of the bedding division were $4465000 while current liabilities were $280000. Homestore corporation's target rate of return is 14%. the bedding division manager is considering whether to invest in a project that annually generates $180000 and operating income of $1500000 of sales and requires $1200000 in operating assets. what is the project's residual income and should the division manager accept or reject the project?
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