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5. Bowen Incorporated has five departments. The companys desired return for all departments is 8%. The service department currently has a return of 12% on
5. Bowen Incorporated has five departments. The companys desired return for all departments is 8%. The service department currently has a return of 12% on $250,000 of operating assets. The company is considering purchasing a new $150,000 machine for the service department. The new machine is expected to have a 10% return. What will be the service departments residual income if the investment is accepted? | |||||||
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