Using the Following Information, Calculate the Residual Profit A) $26 000
B) $40 400
C) $46 000
D)

question 47

Multiple Choice

Using the following information, calculate the residual profit.
$$\begin{array} { l r } \text { Sales } & \$ 750000 \\\text { Profit } & \$ 50000 \\\text { Average operating assets } & \$ 300000 \\\text { Shareholders' equity } & \$ 120000 \\\text { Minimum required rate of return } & 8 \%\end{array}$$

• A) $26 000
• B) $40 400
• C) $46 000
• D) $ Nil

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Definitions:

Moving Average

A statistical measure that smooths out price data by creating a constantly updated average price over a specific period of time.

Buy Signal(s)

Indications or signals used by investors to suggest the optimal time to purchase a stock or investment.

Behavioral Concept

A concept in finance that incorporates psychological theories into conventional economic theory to explain unusual market phenomena.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.