alleryStart learning →A division has profit Rs 90,000, capital Rs 600,000, required return 12%. What is residual income?
ARs 72,000
BRs 162,000
CRs 18,000
DRs 90,000
Answer & Solution
Correct answer: C. Rs 18,000
Capital charge = 12% x 600,000 = 72,000; residual income = 90,000 - 72,000 = 18,000.
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