The following data has been provided for a company’s most recent year of operations: Return on investment 20% Average operating assets $ 100,000 Minimum required rate of return 15% The residual income for the year was closest to:

$5,000

Explanation:

The return on investment is 20%

= 20/100

=0.2

The average operating assets is $100,000

The minimum required rate of return is 15%

= 15/100

= 0.15

The first step is to calculate the net operating assets

= ROI× average operating assets

= 0.2×100,000

= $20,000

Therefore, the residual income can be calculated as follows

= Net operating income-(minimum required rate of return×average operating assets)

= $20,000-($100,000-0.15)

= $20,000-15,000

= $5,000

Hence the residual income for the year was closest to $5,000

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o

answercountries with higher real income per capita tend to have higher levels of this index.