Question 2 (of 6) 2. 166 points value Juniper Design Ltd. of Manchester, England

Question

Question 2 (of 6) 2. 166 points value 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 $460,000 on sales of $1,300,000. The company's average operating assets for the year were $1,500,000 and its minimum required rate or return was 14% Required Compute the company's residual income for the year Average operating assets Net operating income Minimum required return Residual income Hints References eBook & Resources Hint #1

Explanation / Answer

Average operating assets = 1500000

Net operating income = 460000

Minimum required return = 1500000 * 14% = 210000

Residual income = 460000 - 210000 = 250000

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