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Exercise 10-16 Colleen Barry is the general manager of Cullumber Industries Industrial Products division. The division is treated as an investment center, and Colleens performance

Exercise 10-16

Colleen Barry is the general manager of Cullumber Industries Industrial Products division. The division is treated as an investment center, and Colleens performance is measured using residual income. In preparing the forecast for next year, Colleen assumes the division will generate $30,110,000 in revenue using average operating assets of $19,020,000 . The required minimum rate of return is 16%. (a) If Colleen wants the division to achieve $1,959,000 in residual income, what is the maximum amount of operating expenses the division can incur to achieve that target?

Operating expenses $

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