Reef Corphas Revenues of $500,000 Resulting in an Operating Income of of $54,000.Invested

question 47

Multiple Choice

Reef Corp.has revenues of $500,000 resulting in an operating income of $54,000.Invested assets total $600,000,the cost of capital is 6%.Calculate the increase in residual income if sales increase by 10% and the profit margin and invested assets remain the same.

• A)$5,400
• B)$24,000
• C)$0
• D)$7,500

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