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Assume that next year Research in Motion sells off its interest in TIP Communications (one of its subsidiaries). Forecasted information about the operations for RIM and TIP for that future fiscal year immediately prior to the proposed sale follows:

$millions RIM TIP Total
Revenues $20,943 $1,727 22.670
Operationing expenses 20,321 1,971 22,292

*Does not include TIP results. Includes cost of goods sold

Required:

1.Compute operating income for RIM and TIP, separately, and the total operating income for both.
2.If the results in part 1 for TIP are typical, why do you believe RIM decided to sell off its interest in TIP?
Your response to the Case Study will be graded based upon the Case Study Rubric and receive a maximum of 100 points.

 

Accounting Basics, Accounting

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