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The West Division of Keely Inc. reports current operating income of $150,000 and operating assets of $800,000. The manager of the West Division has the
The West Division of Keely Inc. reports current operating income of $150,000 and operating assets of $800,000. The manager of the West Division has the option to purchase a new asset for $100,000. The new asset is expected to increase the West Division's current operating income by $20,000. Keely Inc.'s minimum rate of return is 14%. Compute West Division's residual income, assuming the manager purchases the new asset
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