Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 16

Investment center analysis; ROI and residual income The Central Division of National, Inc., has operating income of $16,000 on sales revenue of $160,000. Divisional operating assets are $80,000, and management of National has determined that a minimum return of 12% should be expected from all investments.
Required:
a. Using the DuPont model, calculate The Central Division's margin, turnover, and ROI.
b. Calculate The Central Division's residual income.