Residual Income [LO2] Midlands Design Ltd. of Manchester, England, is a company specializing in providing design services
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Residual Income [LO2]
Midlands Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of £400,000 on sales of £2,000,000. The company’s average operating assets for the year were £2,200,000 and its minimum required rate of return was 16%. (The currency in the United Kingdom is the pound, denoted by £.)
Required:
Compute the company’s residual income for the year.
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