Black Sea Company Has Two Divisions,the Old Division and the New

Essay

Black Sea Company has two divisions,the Old Division and the New Division.Last year,the Old Division earned $66,000 using average operating assets of $550,000.Last year,the New Division earned $260,000 using average operating assets of $2,000,000.Minimum required rate of return for Black Sea is 9%. A. For the Old Division, residual income is______
B. For the New Division, residual income is_______ Now assume that the minimum required rate of return for Black Sea is 12%. C. For the Old Division, residual income is_______
D. For the New Division, residual income is_______