Gamma Division
the Manager of Gamma Division Projects the Following $$\begin{array} { l l } \text { Sales } & \$ 100,000 \\\text { Operating income } & \$ 30,000 \\\text { Operating assets } & \$ 200,000\end{array}$$

question 108

Multiple Choice

Gamma Division
The manager of Gamma Division projects the following for next year: $$\begin{array} { l l } \text { Sales } & \$ 100,000 \\\text { Operating income } & \$ 30,000 \\\text { Operating assets } & \$ 200,000\end{array}$$ The manager can invest in an additional project that would require $30,000 investment in additional assets and would generate $4,200 of additional income. The company's minimum rate of return is 12%.
-Refer to Gamma Division. What is the residual income without the additional investment?

• A) $4,200
• B) $6,000
• C) $6,600
• D) $24,000

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