The Extan Division of World Corporation Reported a Residual Income

question 48

Multiple Choice

The Extan division of World Corporation reported a residual income of $200 000. The division had $8 million of invested capital and a profit of $1 million. What is the imputed interest rate?

• A) 7.5%
• B) 10.0%
• C) 12.5%
• D) 20%

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