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Assume a company reported the following results: Sales $ 400,000 Variable expenses 260,000 Contribution margin 140,000 Fixed expenses 40,000 Net operating income $ 100,000 Average
Assume a company reported the following results:
| Sales | $ 400,000 |
|---|---|
| Variable expenses | 260,000 |
| Contribution margin | 140,000 |
| Fixed expenses | 40,000 |
| Net operating income | $ 100,000 |
| Average operating assets | $ 500,000 |
If the companys minimum required rate of return on average operating assets is 16%, its residual income would be:
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