Answer:
Residual income is $ 123,800.00
Explanation:
The formula for residual income is given below:
Residual Income = operating income - (Required Return × Average Operating Assets)
The operating income=Sales-costs of goods sold-operating expenses
sales is $4,665,000
costs of good sold is $2,690,000
operating expenses of $1,512,000
operating income=$4,665,000-$2,690,000-$1,512,000
operating income=$463,000
residual income:
required return is 8%
average operating assets is $4,240,000
residual income=$463,000-($4,240,000*8%)
=$463,000-$339,200
=$123,800.00
