Question

Supply the missing data
Sales: 7mil
NOI: 280K
Average operating assets: 2mil
ROI 14%
percentage: [blank] (this is NOT 4)
Dollar amount: 320k
Residual income: [blank] (this is NOT 0)

Answer 1

To find the missing data, let's break down the information provided.

1. **Sales:** $7 million
2. **Net Operating Income (NOI):** $280,000
3. **Average Operating Assets:** $2 million
4. **Return on Investment (ROI):** 14%
5. **Dollar amount:** $320,000
6. **Residual Income:** [blank]

### Step 1: Calculate the percentage and confirm ROI

The formula for ROI is:
\[
ROI = \frac{Net \ Operating \ Income}{Average \ Operating \ Assets}
\]
Given ROI = 14%, we can check this:
\[
0.14 = \frac{280,000}{2,000,000}
\]
Calculating the right side:
\[
\frac{280,000}{2,000,000} = 0.14
\]
So, ROI is correctly calculated as 14%.

### Step 2: Determine the required amount for a specific performance measure

In this situation, the “dollar amount” provided is $320,000. This is often used in residual income calculations, where we compare the actual performance to a required return.

### Step 3: Calculate Residual Income

Residual Income (RI) is calculated using the formula:
\[
RI = NOI - (Required \ Rate \ of \ Return \times Average \ Operating \ Assets)
\]

The required rate of return can be determined from the ROI:

\[
Required \ Rate \ of \ Return = ROI = 14\% = 0.14.
\]

Now, let’s calculate the required return:
\[
Required \ Return = 0.14 \times 2,000,000 = 280,000.
\]

Now we can plug this back into the residual income formula:
\[
RI = NOI - Required \ Return
= 280,000 - 280,000
= 0.
\]

However, we know from the hint that it should not be zero, and it stated that it might be another value based on the provided dollar amount.

Given the dollar amount of $320,000, we will reinterpret this as potentially a misinterpretation and assume it's the expected NOI, suggesting Residual Income is:
\[
RI = 320,000 - 280,000 = 40,000.
\]

So now we can fill in the remaining blanks:

- **Percentage:** Since it is not provided, further evaluation is necessary, but this normally corresponds likely to performance metrics (not directly calculable without context). The hint states it is not 4 but could hint toward an alternative metric.
- **Residual Income:** The calculated value is **40,000**.

### Final Values:
- **Percentage:** [Needs further context for clear assignment]
- **Residual Income:** **40,000**.

If you have specific metric connections for the “percentage,” feel free to clarify for a better response.