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Sunny_sXe [5.5K]
2 years ago
13

Reform Traders current net operating income is $16,800 and its average operating assets are $90,000. The company's required rate

of return is 15%. A new project being considered would require an investment of $28,000 and would generate annual net operating income of $3,100. What is the residual income of the new project
Business
1 answer:
Tresset [83]2 years ago
7 0

Answer:

- $4,200

Explanation:

residual income = net operating income - cost of investment

therefore

residual income = $3,100 - $28,000 x 15%

                           = - $4,200

The residual income of the new project is - $4,200

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Giving the following information:

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Hey There!

Here is your answer:

Your answer is: False!

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