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Zoes, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was
Zoes, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year, (Click the icon to view the information) Calculate each division's RI. Interpret your results. First, select the formula to calculate residual income (RI). Data table Operating income Average total assets Target rate of return The residential division's RI is The professional division's Riis Asset turnover ratio Residential Professional Net Sales Revenue Operating Income Average Total Assets 570,000 $ 1,090,000 64,000 $ 194,000 163,510 394,000 Both divisions are exceeding management's exper Average total assets Management has a 23% target rate of return for each division. Net sales revenue Operating income Target rate of return Print Done
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