Winton Company Has Three Divisions

question 107

Multiple Choice

Winton Company has three divisions.The Florida Division has a 30 percent tax rate, a 4.5 percent cost of capital, and a 7.5 percent required rate of return.During the fiscal year, the division reported sales of $3,920,000.Interest expense was $120,000 and net income was $122,800.The Florida Division has total assets of $2,950,000 and noninterest-bearing liabilities of $150,000.How much is the Florida Division's residual income?

• A)$80,800
• B)($3,200)
• C)$32,800
• D)None of these answer choices are correct.

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