Assume That Division J Has Achieved Income from Operations of $165,000

question 131

Multiple Choice

Assume that Division J has achieved income from operations of $165,000 using $900,000 of invested assets. If management desires a minimum rate of return of 11%, the residual income is:

• A) $99,000
• B) $18,150
• C) $264,000
• D) $66,000

---

Definitions:

NDP

Net Domestic Product, an economic indicator measuring the total value of all goods and services produced within a country in a year, minus depreciation.

National Income

The total monetary value of all goods and services produced by a country's economy over a specific time period, excluding income earned abroad.

GDP

Gross Domestic Product, abbreviated as GDP, embodies the total market and monetary worth of all products and services that are finalized within a country's borders throughout a defined period.

Depreciation

An accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.