If the residual income for the year was $9,000, the minimum required rate of return must have been:

A) 15%
B) 4%
C) 20%
D) 36%

Residual income = Net operating income - (Average operating assets × Minimum required rate of return)
$9,000 = $36,000 - ($180,000 × Minimum required rate of return)
$180,000 × Minimum required rate of return = $36,000 - $9,000 = $27,000
$180,000 × Minimum required rate of return = $27,000
Minimum required rate of return = $27,000 ÷ $180,000 = 15%
Reference: CH10-Ref12
Robichau Inc.reported the following results from last year's operations: At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics: The company's minimum required rate of return is 20%.