Question

Hamlin Corporation had $220,000 in invested assets, income from operations amounting to $48,400, and a desired...

Hamlin Corporation had $220,000 in invested assets, income from operations amounting to $48,400, and a desired minimum rate of return of 10%. Residual income for Hamlin is:

Group of answer choices

$2,200

$26,400

$24,200

$22,000

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Answer #1

Answer : $ 26400.

Residual income = Operating income - ( invested asset * Desired minimum rate of return )

Residual income = $ 48400 - ( 220000 * 10 % ) = $ 26400.

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