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    residual income

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    24. What is Lynch's residual income, given the following information:

    Lynch
    Net earnings for division $20,000
    Asset base for division $50,000
    Target rate of return 15%
    Operating income margin 10%
    Weighted average cost of capital 2%
    Choose the correct answer
    $20,000
    $12,500
    $7,500
    $14,000

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    https://brainmass.com/business/accounting/lynchs-residual-income-232073

    Solution Summary

    The solution shows calculations of residual income.

    $2.19

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