Asked by Beatrice Sarah Jacob on May 23, 2024
Verified
Ibale Industries is a division of a major corporation.The following data are for the latest year of operations: 
Required:
What is the division's residual income?
Residual Income
The profit left over after all necessary capital expenses are subtracted from the operating income, serving as an indicator of financial success.
- Perform computations and evaluations of leftover income.
Verified Answer
ER
emmanuel reynaMay 24, 2024
Final Answer :
Residual income = Net operating income - Minimum required rate of return × Average operating assets = $1,827,560 - 10% × $7,000,000 = $1,127,560
Learning Objectives
- Perform computations and evaluations of leftover income.