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Compute the residual income for both investment centers

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Reference no: EM131818295

Question - The owner of Shrek Toys has recently expanded his business in order to add an additional product line. In addition to toys, the company now sells shirts. The company has a minimum rate of return of 12%.

Toys Shirts

Sales $600,000 $200,000

Controllable margin 120,000 10,000

Average operating assets 900,000 200,000

Instructions - Compute the residual income for both investment centers.

Reference no: EM131818295

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