Ewan Logistics provides the following information:

What is the company's residual income?
A)$(200,000)
B)$540,000
C)$1,320,000
D)$1,060,000

Question

Ewan Logistics provides the following information:

What is the company's residual income?
A)$(200,000) 
B)$540,000 
C)$1,320,000 
D)$1,060,000

Quizplus · Accepted Answer

D)RI = Operating income - Minimum acceptable operating income
 11ea8a42_4fb6_dcbe_8b44_97371a06fc9a_TB5024_00 * Minimum acceptable operating income = Target rate of return × Average total assets
Minimum acceptable operating income = 30% × $1,800,000 = $540,000

Ewan Logistics Provides the Following Information