Required rate of return is 12% a year. Sales revenue is $2,000. Investment (operatiassets) is $4,000. Profit is $160. Compute the residual income (RI).O $480O (8%)O 4%O ($320)O ($80)Question 4

Residual income is the amount of extra earnings that an entity has, after paying of all the…

Answered: Required rate of return is 12% a year.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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F3
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Required rate of return is 12% a year. Sales revenue is $2,000. Investment (operat assets) is $4,000. Profit is $160. Compute the residual income (RI). O $480 O (8%) 4% O ($320) O ($80)