Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 11 - Performance Measurement in Decentralized Organizations - The Foundational 15 - Required - Page 499: 13

Answer

If the company pursues the investment opportunity and otherwise performs the same as last year, this year's residual income would be

Work Step by Step

Average operating assets = ̉625.000 + 120.000 = 745.000. Net operating income = 200.000 + 30.000 = 230.000
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