If divisional income from operations is $75,000,invested assets are $637,500,and the minimum rate of return on invested assets is 6%,the residual income is $36,750.

Question

Quizplus · Accepted Answer

The formula for residual income is divisional income from operations - (invested assets x minimum rate of return), which in this case would be $75,000 - ($637,500 x 0.06) = $75,000 - $38,250 = $36,750. Therefore, the statement is true.

If Divisional Income from Operations Is $75,000,invested Assets Are $637,500,and