Ask Question
14 August, 14:23

Payne Company reported the following information for the current year: Sales $ 840,000 Average operating assets $ 340,000 Desired ROI 12 % Net income $ 54,000 The company's residual income was: Multiple Choice $40,800. $6,000. $13,200. $19,200.

+4
Answers (1)
  1. 14 August, 14:41
    0
    Residual income will be $13200

    So option (c) will be correct answer

    Explanation:

    We have given Sales = $840000

    Average operating assets = $340000

    Desired ROI = 12%

    Net income = $54000

    We have to find the residual income

    Residual income is given by

    Residual income = Net income - (Average operating assets * desired ROI)

    = $54000 - ($340000 * 0.12) = $13200

    So option (c) will be correct answer
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Payne Company reported the following information for the current year: Sales $ 840,000 Average operating assets $ 340,000 Desired ROI 12 % ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers