Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows:Sales$8,200,000Operating income$2,788,000Total assets$3,280,000Current liabilities$400,000Required rate of return14%Weighted average cost of capital3%What is the Photocopier Division's residual income? Question 16 options: $459,200 $2,328,800 $3,247,200 $2,689,600

Residual Income = Operating Income - (Total Operating Assets x Required Rate of Return) Residual Income = $2,788,000 - ($3,280,000 x 14%) Residual Income = $2,328,800

Answered: Selected financial data for the…

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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Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows:

Sales	$8,200,000
Operating income	$2,788,000
Total assets	$3,280,000
Current liabilities	$400,000
Required rate of return	14%
Weighted average cost of capital	3%

What is the Photocopier Division's residual income?

Question 16 options:

	$459,200
	$2,328,800
	$3,247,200
	$2,689,600

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