Profile Corporation has total assets of $600,000, an 11% target rate of return, and a residual income of
$6,000. Which of the following statements is incorrect?
A) Profile's return on investment was 12%
B) Profile's operating income was $66,000.
C) Profile's residual income would increase $6,000 if the target rate of return was reduced to 10%.
D) Profile's return on investment will not change when the target rate of return changes.

Question

Quizplus · Accepted Answer

The Answer of Profile Corporation has total assets of $600,000, an 11% target rate of return, and a residual income of
$6,000. Which of the following statements is incorrect?
A) Profile's return on investment was 12%
B) Profile's operating income was $66,000.
C) Profile's residual income would increase $6,000 if the target rate of return was reduced to 10%.
D) Profile's return on investment will not change when the target rate of return changes.

Profile Corporation Has Total Assets of $600,000, an 11% Target