QUESTION 16

Information for Tube division is as follows: - Net earnings for division $40,000 - Asset base for division$100,000 - Target rate of return 16% - Operating income margin 12% - Weighted average cost of capital 8%. What is Tube's residual income?

		$26,000
		$24,000
		$32,000
		$95,200

2.5 points

QUESTION 17

Which of the following capital budgeting techniques provides the decision maker with answers expressed in dollars?

		Payback method
		Internal rate of return
		Net present value
		None of the above