Question

QUESTION 9 If Division Q's income from operations was $30,000 on invested assets of $200,000, the rate of return on investment is 15%. True False QUESTION 10 The Anderson Company has sales of $4,500,000. It also has invested assets of $2,000,000 and operating expenses of $3,600,000. The company has established a minimum rate of return of 7%. What is Anderson Company's residual income? A. $252,000 B. $900,000 C. $1,400,000 D. $760,000 QUESTION 11 The excess of divisional income from operations over a minimum amount of desired income from operations is termed the residual income. True False QUESTION 12 CielSane and Subte l 11 -11

Answer 1

9) ROI = Income from operating/Invested assets = 30000/200000 = 15%

So above statement is true

10) Residual income = 900000-(2000000*7%) = 760000

So answer is d) $760000

11) Yes the excess of divisional operating income over a minimum required income is called residual income

So above statement is true