Question

IN Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] A food manufacturer reports the following for two of its divisions for a recent year. (5 millions) Invested assets, beginning Invested assets, ending Sales Operating income Beverage Division $2,662 2,593 2.681 349 Cheese Division $4,455 4.400 3,925 634 Exercise 09-13 Residual income LO A1 Assume that each of the company's divisions has a required rate of return of 7%. Compute residual income for each division (Enter your answers in millions.)

Answer 1

Solution:

Target Income	Beverage division	Cheese Division
Average Assets	$2,628	$4,428
Target Return	7%	7%
Target Income	$184	$310
Residual Income	Beverage division	Cheeze division
Operating Income	$349	$634
Less: Target Income	$184	$310
Residual Income	$165	$324

General Excel Poo-1. Microsoft Excel X Review File Home Irisert Paye Layuut Formulas Dala View fx Define Name Trace Precedents IShnw Formulas Σ е Caloulate Now Trace Dependents Frror Checking Use in Formula AutoSum Recently Financial Logical Text Date & Lookup & Math & Calculation Calqulate Sheet Watch Insert More Name Time Reference Trig Functions Manager iCreate from Selection Remove Amows ) Evaluate Formula Window Options Function Used Formula Auditing Function Library Defined Names Calculation 115 C D E F G 15 16 Target Income Beverage division Cheese Division 17 =(4455+4400)/2 0.07 =+H18 H19 Average Assets Target Return Target Income (2662+2593) /2 0.07 =+G18 G19 18 19 20 Cameras and Camcorders Residual Income Phones and Communications 21 Operating Income Less: Target Income+G20 Residual Income 349 22 634 23 H20 E+G22-G23 24 H22-H23 25 26 27 28 29 30 31 32 33 34 35 HSheet579 Sheet580 Sheet181 (8)Sheet306 (2)Sheet583Sheet48 (12) Sheet79 (8) Sheet586 Shee 100%) Ready Circular Heferences (+ 08:50 е Type here to search ^ xE ENG 24-11-2019

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