Ask Question
BusinessBusiness
2 July, 20:02

A segment of a company with an ROI of 25% has an income of $84,000. The company's required rate of return on segment investments is 18%. The segment's residual income is: A. $14,280 B. $33,600 C. $21,000 D. $23,520

+4
Answers (1)
  1. 2 July, 22:26
    0
    D. $23,520

    Explanation:

    The cost of investment in the segment shall be determined from the ROI formula in the following mentioned manner:

    ROI=Net profit/cost of investment

    25%=$84,000/Cost of investment

    Cost of investment=$336,000

    The residual income of the segment of any company is determined through following mentioned formula:

    Residual income=Net income - (required rate of return*cost of investment)

    Residual income=$84,000 - (18%*$336,000)

    =$23,520

    So based on the above calculations, the answer is D. $23,520
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A segment of a company with an ROI of 25% has an income of $84,000. The company's required rate of return on segment investments is 18%. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
You buy a call option on Summit Corp. with an exercise price of $40 and an expiration date in September, and you write a call option on Summit Corp. with an exercise price of $40 and an expiration date in October. This strategy is called a
Answers (1)
Self-sufficiency is the key to being successful. agree or disagree
Answers (1)
Which high school elective course would be most useful for a career in tool and die making
Answers (2)
Which of the following statements is incorrect with regard to product costs? A. Product costs flow from the balance sheet to the income statement. B. Unlike direct material and direct labor costs, overhead costs must be allocated to products. C.
Answers (1)
If a jordanian confers very closely with another business person, this is an example of
Answers (1)
New Questions in Business
Miles uses the allowance method and wrote off the account of james. miles then received $559 as partial payment on the account of james. the journal entry to record the initial write-off includes? a
Answers (1)
U. S. Interest Rates during the Credit Crisis During the credit crisis, U. S. interest rates were extremely low, which enabled businesses to borrow at a low cost.
Answers (1)
The following production data were taken from the records of the finishing department for June:Inventory in process, June 1, 25% completed 1,500 unitsTransferred to finished goods during June 5,000 unitsEquivalent units of production during June
Answers (1)
Your insurance agent is trying to sell you an annuity that costs $75,000 today. By buying this annuity, your agent promises that you will receive payments of $500 per month for 20 years.
Answers (1)
James is an auditory learner. what is the best way for him to process his notes
Answers (2)
Home » Business » A segment of a company with an ROI of 25% has an income of $84,000. The company's required rate of return on segment investments is 18%. The segment's residual income is: A. $14,280 B. $33,600 C. $21,000 D. $23,520
Sign Up Forgot Password?