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What is the division Residual Income

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Reference no: EM132952973

Question - The Outdoor Division of World Corporation reported the following results from the past year. Shareholders require a return of 10%. Management calculated a weighted-average cost of capital (WACC) of 7%. The company's corporate tax rate is 30%.

Sales: $700,000

Operating Income: 245,000

Total assets: $1,500,000

Current Liabilities: 400,000

What is the division's Residual Income (RI)?

A. $70,000

B. $175,000

C. $245,000

D. $95,000

Reference no: EM132952973

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