contestada

Pankey Inc. has a $700,000 investment opportunity that would involve sales of $1,050,000, a contribution margin ratio of 40% of sales, and fixed expenses of $325,500. The company's minimum required rate of return is 18%. The residual income for this year's investment opportunity is closest to:

Respuesta :

Kolawole845

Answer:

Residual income =  $666,270

Explanation:

The residual income is the amount left after the opportunity cost of capital deducted from the net operating income

Operating income=Contribution margin -Fixed cost

Operating income= 1,050,000 - 325,500= $724,500

Residual income = Net income - (cost of capital × capital invested)

=$724,500  - (18% × 323,500)= 666270

Residual income =  $666,270

Otras preguntas

Q&A Education