Question
Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 1,000,000 $ 1,700,000 Operating Income $ 600,000
Consider the following data from two divisions of a company, P and Q:
| Divisional | P | Q | ||||
| Sales | $ | 1,000,000 | $ | 1,700,000 | ||
| Operating Income | $ | 600,000 | $ | 680,000 | ||
| Investment | $ | 1,700,000 | $ | 2,040,000 | ||
If the minimum rate of return is 10%, what is Division P's residual income (RI)?
Multiple Choice
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$430,000.
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$770,000.
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$830,000.
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$940,000.
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$1,640,000.
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Financial Accounting Tools For Business Decision Making
Authors: Paul D. Kimmel
3rd Canadian Edition
0470836792, 978-0470836798
