Ans:Option 1: 15% is Correct Answer \
Explanation:
Net operating income 36000
Less: Residual Income 9000
Minimum Target Return 27000
Divide: Average Operating assets 180000
Minimum Rate of return =27000/180,000*100= 15%
(Minimum Target Return/ Average Operating assets)*100
UT TB MC Qu. 11-122 The following data pertain to Turk... The following data pertain to...
MacGyver Corporation's information is below: Sales $ 900,000 Profit $36,000 $ 150,000 Contribution margin Investment capital Stockholders' equity Plant, property, & equipment $135,000 $ 100,000 $120,000 If the residual income for the year was $9,000, the minimum required rate of return must have been: A. 36% B. 4% C. 15% D. 20%
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