Answer:
The division's residual income is $75,180
Explanation:
Residual income : The residual income is that income which is left over after paying taxes and expenses
The formula to compute residual income
= Net operating income - (Average operating assets × minimum required rate of return)
= $1,503,600 - ($7,518,000 × 19%)
= $1,503,600 - $1,428,420
= $75,180
The total sale is irrelevant while computing the residual income. Thus, it is not considered in computation part.
Hence, The division's residual income is $75,180
