Beery 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 12%.If the company pursues the investment opportunity,this year's combined residual income for the entire company will be closest to:
A) $848,700
B) $942,000
C) $24,300
D) $114,000

Question

Beery 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 12%.If the company pursues the investment opportunity,this year's combined residual income for the entire company will be closest to:
A) $848,700 
B) $942,000 
C) $24,300 
D) $114,000

Quizplus · Accepted Answer

11ea7761_1665_6c1c_81a5_717fc3d5db76_TB2580_00 Net operating income = $798,000 + $144,000 = $942,000
Average operating assets = $6,000,000 + $900,000 = $6,900,000
 11ea7761_1665_932d_81a5_d3fd5454fc5b_TB2580_00

Beery IncReported the Following Results from Last Year's Operations