With Desired ROI 12% , Net income$361,600 , Residual income $280,000, the division's investment amount of Howard company will be $680000.
Since, Residual Income = Net Income - Investment X desired ROI
thus, putting the values given,
$280000 = $361,600 - Investment X 12%
Investment = [361600 - 280000]/12%
Investment = [81600 * 100] / 12
Investment = $680,000
The question is incomplete, complete question can be found here
Howard Company provided the following selected information about its consumer products division for the current year:
Desired ROI 12%Net income$361,600 Residual income$280,000
Based on this information, the division's investment amount was?
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