Question
Division ZEN is a division of Apple Company electronic equipment company . Following data related to division ZEN Capital employed (loan + share capital): $600,000
Division ZEN is a division of Apple Company electronic equipment company . Following data related to division ZEN Capital employed (loan + share capital): $600,000 Annual operating profit: $150,000 Cost of capital: 20% per Annum. Apple Company is considering the following proposal for division ZEN: Invest further $60,000 in Non-current assets to earn annual operating profit of $15,000. What is the 'Residual Income ' as per the the proposal of further investment in Non- current assets for division Zen
A. $ 18000
B. $ 42000
C. $ 41000
D. $ 33000
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Cost Management Measuring Monitoring And Motivating Performance
Authors: Leslie G. Eldenburg, Susan Wolcott
1st Edition
0471205494, 978-0471205494
