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is Question: 1 pt The Box Manufacturing Division of the Alied Paper Company reported the following results from the past year
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Answer #1

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

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