What Is the Residual Income for a Firm with $1

question 90

Multiple Choice

What is the residual income for a firm with $1 million in total capital, $300,000 in net income, and a 20% cost of capital? (Use the value in dollars)

• A)$100,000
• B)$140,000
• C)$240,000
• D)$500,000

---

Definitions:

Poorest

Referring to the individuals or groups with the lowest income and wealth levels in a society.

Soft Loans

Loans that are offered with more favorable terms than market loans, typically including lower interest rates and longer repayment periods.

Developing Countries

Nations with a lower level of industrialization, lower standard of living, and lower Human Development Index compared to developed countries.

International Development Association

A part of the World Bank that helps the world’s poorest countries by providing loans and grants for projects and programs that boost economic growth and improve living conditions.