Payne Company Reported the Following Information for the Current Year

question 9

Multiple Choice

Payne Company reported the following information for the current year: $\begin{array}{llr} \text {Sales } &\$1,600,000\\ \text { Average operating assets} &\$500,000\\ \text { Desired ROI } &14\%\\ \text { Operating income } &\$85,000\end{array}$
The company's residual income was:

• A) $(15,000).
• B) $14,000.
• C) $15,000.
• D) $24,000.

---

Definitions:

Corporate Stock

Represents ownership shares in a corporation, allowing shareholders to claim a portion of the company's profits.

Expected Rate

The projected or anticipated rate of return on an investment over a specific period.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain it.

Marginal Efficiency

The additional benefit received from consuming or producing one more unit of a good or service.