Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?

Residual Income

The amount of income that an entity has after all personal debts and expenses, including the cost of capital, have been paid.

Acceptable Return

The minimum profit or benefit expected by an investor for the risk taken on an investment.

Income from Operations

Financial performance metric that shows earnings from normal business activities, excluding effects of interest and taxes.