What Is the Residual Income for a Firm with $1

question 16

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?

• A)$400,000
• B)$300,000
• C)$200,000
• D)$100,000 Total capital x cost of capital
• $1 million x .2 = $200,000
• Residual income = Net Income - Cost of Capital

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Definitions:

Color Deficient

A visual condition where an individual has difficulty distinguishing between certain colors, commonly referred to as color blindness.

Legally Blind

A defined level of visual impairment in which an individual has a corrected visual acuity of 20/200 or less in the better eye or a visual field that is 20 degrees or less.

Visual Acuity

Visual Acuity is a measure of the clarity or sharpness of a person's vision, often assessed by their ability to recognize letters or numbers at a standardized distance.