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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 10%
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 10% and the weighted average cost of capital is 25%. Its effective tax rate is 35% What is the division's Residual Income (RI)? A. $1,250,000 B. $1,400,000 C. $1,750,000 D. $490,000
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