Ask Question
8 September, 04:17

Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales $ 37,880,000 Net operating income $ 3,508,960 Average operating assets $ 9,400,000 The company's minimum required rate of return 14 % The division's residual income is closest to:

+4
Answers (1)
  1. 8 September, 05:55
    0
    The division's residual income is closest to $2,192,960

    Explanation:

    Residual income=net income - (average operating assets*required rate of return)

    net operating income is $3,508,960

    average operating assets is $ 9,400,000

    required rate of return is 14%

    residual income = $3,508,960 - ($9,400,000*14%)

    residual income=$3,508,960-$1,316,000

    residual income = $2,192,960

    The residual income is the residue of net income after deducting an amount equivalent of cost of using the assets of the company funded by finance providers.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales $ 37,880,000 Net ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers