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A company's current net operating income is $26,000 and its average operating assets are $100,000. The company's required rate of return is 16%. A new

A company's current net operating income is $26,000 and its average operating assets are $100,000. The company's required rate of return is 16%. A new project being considered would require an investment of $25,000 and would generate annual net operating income of $6,250. What is the residual income of the new project?

a) (250)

b) 250

c)2250

d)1000

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