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Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 15%
Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 15% and the weighted average cost of capital is 20%. Its effective tax rate is 30%. What is the division's Residual Income (R)) ? A. $787,500 B. $4,500,000 C. $2,500,000 D. $2,625,000
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