Question :

Consider that next year Research in Motion sells off its interest in TIP Communications (one of its subsidiaries). Forecasted information about the operations for TIP and RIM for that future fiscal year instantly 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. Evaluate operating income for RIM and TIP, discretely, and the net operating income for both.

2. If the results in part 1 for TIP is typical, why do you consider RIM decided to sell off its interest in TIP?