Rooney Inc

question 132

Multiple Choice

Rooney Inc.had $375,000 in invested assets, sales of $735,000, operating income amounting to $105,000, and a minimum acceptable rate of return of 12% on its invested assets.The residual income for Rooney is:

• A) $42,500.
• B) $20,500.
• C) $60,000.
• D) $37,500.

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Definitions:

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, given the current level of prices.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, leading to a situation where firms in a competitive market produce output at the lowest possible cost per unit.

Taxes

Mandatory payments made to the government, taken from individuals' earnings and company gains, or included in the prices of certain products, services, and dealings.

Short Run

The short run is a time period in which at least one input is fixed, limiting the ability of a firm to adjust to market changes.