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Practice problem 2 . Residual Income ( RI ) Amount that operating income exceeds a minimum acceptable income To find minimum acceptable income, multiply division's
Practice problem Residual Income RI
Amount that operating income exceeds a minimum acceptable
income
To find minimum acceptable income, multiply division's invested
assets by required rate of return
Operating income Invested assets
At a required rate of return:
RI for Division
RI for Division
Interpretation?
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