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Shrewsbury Inc The Company's Minimum Required Rate of Return Is 14

question 149

Multiple Choice

Shrewsbury Inc. reported the following results from last year's operations: $Shrewsbury Inc. reported the following results from last year's operations: At the beginning of this year, the company has a $800,000 investment opportunity with the following characteristics: \begin{array}{lc} \text { Sales } & \$ 2,480,000 \\ \text { Contribution margin ratio } & 40 \% \text { of sales } \\ \text { Fixed expenses } & \$ 868,000 \end{array} The company's minimum required rate of return is 14%. The residual income for this year's investment opportunity when considered alone is closest to: A) $124,000 B) $12,000 C) $0 D) $108,800$ At the beginning of this year, the company has a $800,000 investment opportunity with the following characteristics:
$\begin{array}{lc}\text { Sales } & \$ 2,480,000 \\\text { Contribution margin ratio } & 40 \% \text { of sales } \\\text { Fixed expenses } & \$ 868,000\end{array}$ The company's minimum required rate of return is 14%.
The residual income for this year's investment opportunity when considered alone is closest to:

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