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Calculate residual income for agri-products ltd

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Reference no: EM132974375

The Vertical Farming Division of Agri-Products Ltd had sales of $4,800,000 and operating income of $1,084,000 last year. The total assets of the Vertical Farming Division were $5,300,000, while current liabilities were $580,000. Agri-Products Ltd's target rate of return is 15%, and its weighted average cost of capital is 9%. The effective tax rate for the company is 29%.

Problem 1. Calculate ROI, profit margin and asset turnover

Problem 2. Calculate residual income.

Reference no: EM132974375

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