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Worldwide Logistics provides the following​ information: Operating income $ 1 comma 550 comma 000 Net sales $ 14 comma 000 comma 000 Average total assets $ 2 comma 000 comma 000 ​Management's target rate of return 30​% What is the​ company's residual​ income?

Respuesta :

Zviko

Answer:

The​ company's residual​ income is $950,000.

Explanation:

Residual Income is calculated as Operating Income less Cost of Investment.

Calculation of Residual Income :

Operating income                                              $1,550,000

Less Cost of Investment ($2,000,000 × 30%)  ($600,000)

Residual Income                                                   $950,000

Conclusion :

The​ company's residual​ income is $950,000.

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