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The Magnolia Con What is the residual Dision A has income from operations of $87,900 and assets of $313,000. The minimum acce
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Answer #1
Ans. Residual income =   Income from operations - Minimum required income
$87,900 - $43,820
$44,080
*Minimum required income   =   Assets * Acceptable rate of return
$313,000 * 14%
$43,820
*Residual income is the difference between Net operating income and minimum required income, and the
minimum required income is the product of average assets and acceptable rate of return.
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