In the Current Year,the New Products Division of Testar Company

question 84

Multiple Choice

In the current year,the New Products Division of Testar Company had operating income of $8,000,000 and operating assets of $44,800,000.Testar has set a target return on investment (ROI) of 16% for each of its divisions.Which of the following statements is correct?

• A) The New Products division yielded ROI that was lower than the target ROI.
• B) Residual income for the New Products division was $832,000.
• C) The New Products division yielded no residual income.
• D) All of these answers are correct.

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