Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

تمرين 25

Residual Income
Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results:
Washington's actual cost of capital was 12%.
Refer to the information for Washington Company above. In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 8%.
Required:
1. Calculate the residual income for the Adams Division.
2. Calculate the residual income for the Jefferson Division.