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The following data are available for Division X: Sales COGS OP EX Total Current Assets-ave Total NCA Assets-ave WACC O Assuming that a new project offers Division X a residual income of 5,000, what should be the action of Division X's manager if its performance was measured using Residual income? O 675,000.00 400,000.00 237,500.00 250,000.00 500,000.00 4% • Reject • Accept, for additional residual income. of 5,000 • Reject, due to positive income It depends on the ROI None of the above

The following data are available for Division X: Sales COGS OP EX Total Current Assets-ave Total NCA Assets-ave WACC O Assuming that a new project offers Division X a residual income of 5,000, what should be the action of Division X's manager if its performance was measured using Residual income? O 675,000.00 400,000.00 237,500.00 250,000.00 500,000.00 4% • Reject • Accept, for additional residual income. of 5,000 • Reject, due to positive income It depends on the ROI None of the above

FINANCIAL ACCOUNTING
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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The following data are available for Division X: Sales COGS OP EX Total Current Assets-ave Total NCA Assets-ave WACC 675,000.00 400,000.00 237,500.00 250,000.00 500,000.00 Assuming that a new project offers Division X a residual income of 5,000, what should be the action of Division X's manager if its performance was measured using Residual income? ● 4% Accept, for additional residual income of 5,000 ● Reject, due to positive income • Reject • It depends on the ROI ● • None of the above
Transcribed Image Text:The following data are available for Division X: Sales COGS OP EX Total Current Assets-ave Total NCA Assets-ave WACC 675,000.00 400,000.00 237,500.00 250,000.00 500,000.00 Assuming that a new project offers Division X a residual income of 5,000, what should be the action of Division X's manager if its performance was measured using Residual income? ● 4% Accept, for additional residual income of 5,000 ● Reject, due to positive income • Reject • It depends on the ROI ● • None of the above
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