Question 11

The North Division of the Lyman Company reported the following data for last year: Net operating income $200,000 Interest expense $50,000 Tax expense $60,000 Stockholders' equity $250,000 Average operating assets $500,000 Minimum required rate of return 14% The residual income for the North Division last year was: $130,000 $126,000 $90,000 $70,000