If Operating Income Is $60,000, Average Operating Assets Are $240,000

question 8

Multiple Choice

If operating income is $60,000, average operating assets are $240,000, and the minimum required rate of return is 20%, what is the residual income?

• A)40%
• B)25%
• C)$12,000
• D)$48,000

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Definitions:

Net Income

The amount of income that remains after deducting all expenses, taxes, and costs from gross income.

Savings Account

An account in which the bank pays interest for the use of the money deposited in the account.

Surface Book

A series of high-performance laptop computers designed and manufactured by Microsoft, featuring detachable screens for tablet use.

Electricity Costs

The amount charged for the consumption of electrical power, usually based on a per-kilowatt-hour rate and other fees.