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The following information is related to the current operation of Kenanga Branch. Operating income 5 , 0 0 0 , 0 0 0 Sales revenue

The following information is related to the current operation of Kenanga Branch.
Operating income 5,000,000
Sales revenue 62,500,000
Average operating asset 25,000,000
Average balance in current liabilities 13,400,000
The management of the company has decided that the minimum return required is 11 percent.
Residual income is another approach that can be used to measure performance of an investment centre. Define residual income and determine the residual income for Kenanga Branch.

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