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Calculate the residual income for the adams division

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Reference no: EM132038117

Question - Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results:

 

Adams Division

Jefferson Division

Net (after-tax) income

$647,350

$324,450

Total capital employed

4,360,000

3,640,000

In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 8%.

Required: Enter negative values as negative numbers.

1. Calculate the residual income for the Adams Division.

2. Calculate the residual income for the Jefferson Division.

Reference no: EM132038117

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