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The Pizza Division of Frozen Foods Corporation reported the following results from the past year. Shareholders require a return of 11%. Management calculated a weighted-average
The Pizza Division of Frozen Foods Corporation reported the following results from the past year. Shareholders require a return of 11%. Management calculated a weighted-average cost of capital (WACC) of 2%. The company's corporate tax rate is 30%. Sales $900,000 Operating income 225,000 Total assets $1,700,000 Current liabilities 800,000 What is the division's Residual Income (RI)? a. $99000 b. $126000 c. $38000 d. $225,000
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