ct Folder-See Inside Connect Help Save mework Exercise 11-2 Residual Income [LO1

Question

ct Folder-See Inside Connect Help Save mework Exercise 11-2 Residual Income [LO11-2 Juniper Design Ltd of Manchester, England, is a company specializing in providing design services to residential developers. Last year, the company had net operating income of $400,000 on sales of $1,700,000. The company's average operating assets for the year were $1.900,000 and its minimum required rate of return was 0% Required: Compute the company's residual income for the year Reference links 010L e @ @ @E-- e here to search

Explanation / Answer

average operating assets 1900000 * required return 10% = 190000

net operating income 400000 - 190000 = 210000

residual income is 210000

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