Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total...

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Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total...

Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total $600,000, the cost of capital is 6%. Calculate the increase in residual income if sales increase by 10% and the profit margin and invested assets remain the same.

A. $5,400

B.$24,000

C. $0

D.$7,500

business accounting

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Answer 1

Answer #1

Option (A) is Correct If Sales increase by 10% and profit margin remains same Operating income must also increase by 10 % The

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Answer 2

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Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total...

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Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total...

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Picard Corp. has revenues of $50,000 resulting in an operating income of $54,000. Invested assets total...