Discuss what is divisions residual income

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Shannon Pharmaceuticals has the following information available for one of its divisions in the current year:

Sales revenue $10 000 000
Average operating assets 4 000 000
Return on investment (ROI) 40%

The company requires each of its divisions to generate a minimum return of 30 per cent. What is this division's residual income?

Reference no: EM131797078

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