The Magnolia Company's Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable rate of r
1 answer:
The residual income for the Division A of Magnolia Company for an income from operations of $80,000 will be $32,000.
<h3>What is residual income?</h3>Residual Income is the total of total income from operations less the minimum acceptable rate of return on the deployed assets for such operations over a financial period.
Using the above information, it can be ascertained that the residual income will be,
Hence, the residual income will be as computed above.
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