Brandon, Inc.has provided the following data for last year's operations: Brandon's residual income is:
A)$2, 000
B)$4, 000
C)$3, 500
D)$2, 500

Name: Brandon, Inc.has provided the following data for last year's operations: Brandon's residual income is: A)$2, 000 B)$4, 000 C)$3, 500 D)$2, 500
Brand: Quizplus
Rating: 4.7 (37 reviews)

Question

Brandon, Inc.has provided the following data for last year's operations:  Brandon's residual income is:
A)$2, 000 
B)$4, 000 
C)$3, 500 
D)$2, 500

Quizplus · Accepted Answer

Residual income = Net operating income - (Average operating assets × Minimum required rate of return)
= $6, 000 ÷ ($40, 000 × 10%)= $2, 000