If Profit Before Tax Is $320 000,required Rate of Return

question 29

Multiple Choice

If profit before tax is $320 000,required rate of return is 15% and the investment is $1 900 000 the residual income calculation is:

• A)$1 650 000.
• B)$35 000.
• C)13.2%.
• D)$2 150 000.

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Definitions:

Undisclosed Principal

A principal whose identity is concealed from the third parties with whom the agent is dealing; the rights and obligations of the parties depend on whether the agent makes it clear that she is representing an undisclosed principal rather than operating on her own behalf.

Continuing Business

An ongoing enterprise that maintains its operations over time, adapting to changes as necessary to remain viable.

Consent

Agreement or permission for something to happen, given by someone with full understanding of what is involved.

Modified

Changed or adjusted from the original form, purpose, or condition.