Consider the Following Information for the Executive Division of Buy

question 118

Multiple Choice

Consider the following information for the Executive Division of Buy Electronics: $\begin{array}{lrr}&\text { December } 31\\&2014&2013\\\text { Total assets } & \$ 11,800,000 & \$ 11,000,000 \\\text { Noninterest-bearing current liabilities } & 500,000 & 520,000 \\\text { Net income } & 700,000 & 800,000 \\\text { Interest expense } & 210,000 & 300,000 \\\text { Income tax rate } & 35 \% & 35 \% \\\text { Cost of capital } & 7 \% & 8 \% \\\text { Required rate of return } & 9 \% & 11 \%\end{array}$ How much is residual income for 2014?

• A) $45,500
• B) ($180,500)
• C) $119,000
• D) ($227,500)

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Definitions:

Integrated

Refers to the process of combining or coordinating separate elements to form a cohesive whole.

Rituals

Are prescribed procedures for conducting ceremonial acts, often with a symbolic significance in societies.

Beliefs

Convictions or acceptances that certain things are true or real, often held without immediate evidence.

Organic Solidarity

A concept of social cohesion that arises when the people in a society are interdependent, but hold to varying interests and values.