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Scotch Co. has the following results for the year: Sales P740,000 Variable expenses 260,000 Fixed expenses 300,000 Total divisional assets average P1,000,000.The companys minimum required
Scotch Co. has the following results for the year:
Sales P740,000
Variable expenses 260,000
Fixed expenses 300,000
Total divisional assets average P1,000,000.The companys minimum required rate of return is 14 percent.The residual income and return on investment for Scotch are:
A.
B.
C.
D.
Residual Income
P36,000
P40,000
P36,000
P40,000
Return on Investment
36%
18%
18%
36%
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