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    Return On Investment (ROI) and Residual Income

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    A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below. Show the formulas used:

    Company
    A B C
    Sales $400,000 $750,000 $600,000
    Net Operating Income $ ? $45,000 $ ?
    Average Operating Assets $160,000 ? $150,000
    Return On Investment (ROI) 20% 18% % ?
    Minimum Required Return Rate
    Percentage 15% % ? 12%
    Dollar Amount $ ? $50,000 $ ?
    Residual Income $ ? $ ? $6,000

    © BrainMass Inc. brainmass.com April 3, 2020, 6:23 pm ad1c9bdddf
    https://brainmass.com/economics/income-distribution/return-investment-roi-residual-income-206967

    Solution Summary

    The solution explains how to determine the missing amounts using return on investment and residual income calculations.

    $2.19

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