The residual income formula is calculated by subtracting the product of the minimum required return on capital and the average cost of the capital from the operating income. So, as per the given question the residual income equal to $80, 000.00
Minimum required return = 5% of total assets
ie 5% of $1, 400,000 = $70, 000
Residual Income = Operating Income - Minimum required return
Residual Income = $150, 000 - $70, 000
Residual Income = $80,000
is Question: 1 pt The Box Manufacturing Division of the Alied Paper Company reported the following...
This Uusz: do pls po The Box Manufacturing Division of the Alied Paper Company reported the following results from the past year Shareholders require a retum of 4% Management calculated a weighted average cost of capital (WACC) of 2% Allied's corporate tax rate is 40% Sales $800,000 Operating income 320.000 Total assets 1,600.000 Current liabilities 600.000 What is the division's sales margin? O A 37.50% OB. 40.00% OC 20.00% OD 50.00%
The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 6%. Management calculated a weighted−average cost of capital (WACC) of 3%. Allied's corporate tax rate is 35%. Sales $900,000 Operating income 135,000 Total assets 1,500,000 Current liabilities 600,000 What is the division's Residual Income (RI)? A. $81,000 B. $47,250 C. $45,000 D. $90,000
The Box Manufacturing Division of the Alled Paper Company reported the folowing results from the past year Sharehokders nequire a retun of 6% Managemont calolated a weighted- average oost of captal (WACC) of 3% Alied's corporate tax rate is 30% Sales $300.000 Operating income Total assets Curent labliges 30.000 1,500,000 900,000 What is the division's capital tumover? O A. 167 OB. 50.00 O C. 020 OD. 10.00
The Rainy Division of Seattle Corporation reported the following results from the past year. Shareholders require a retu is 25% of 5% Management calculated a weighted-average cost of captal (VACC) of 3% Rainy's corporate tax rate s000,000 Sales Operating income Total assets Current fabilties 180,000 1,300,000 300,000 What is the division's Residual Income (RI OA $115.000 OB $150,000 Oc. $30,000 OD. $180,000
The Rainy Division of Seattle Corporation reported the following results from the past year. Shareholders require a return of 11% Management calculated a weighted-average cost of capital (WACC) of 2%. Rainy's corporate tax rate is 30 %. $900.000 225,000 $1,700,000 800,000 Sales Operating income Total assets Current liabilities What is the division's Residual Income (RI)? O $99,000 O $126.000 O $225.000 O $38,000