Beery Inc.reported the following results from last year's operations: At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics: The company's minimum required rate of return is 12%.If the company pursues the investment opportunity, this year's combined residual income for the entire company will be closest to:
A)$848,700
B)$942,000
C)$24,300
D)$114,000

Question

Beery Inc.reported the following results from last year's operations:  At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:  The company's minimum required rate of return is 12%.If the company pursues the investment opportunity, this year's combined residual income for the entire company will be closest to:
A)$848,700 
B)$942,000 
C)$24,300 
D)$114,000

Quizplus · Accepted Answer

11ea7998_5c8a_0364_911b_a3441b5ec54d_TB2627_00_TB2627_00 Net operating income = $798,000 + $144,000 = $942,000
Average operating assets = $6,000,000 + $900,000 = $6,900,000 11ea7998_5c8a_0365_911b_cf2d7c50fa0d_TB2627_00_TB2627_00

Beery Increported the Following Results from Last Year's Operations: at at the Beginning