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The following information has been gathered for the abc Division: Sales $ 420,000 Operating income $ 75,000 Average current assets $ 260,000 Cost of capital
The following information has been gathered for the abc Division:
| Sales | $ | 420,000 | ||
| Operating income | $ | 75,000 | ||
| Average current assets | $ | 260,000 | ||
| Cost of capital | 12 | % | ||
| Return on investment | 15 | % | ||
What is the abc Divisions residual income?
Multiple Choice
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$15,000.
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$22,500.
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$18,750.
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$48,000.
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