Question

Mason Corporation had $1,000,000 in invested assets, sales of $1,275,000, income from operations amounting to $216,000, and a desired minimum rate of return of 15%.

The residual income for Mason Corporation is

a.$92,400

b.($5,000)

c.$0

d.$66,000

he following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

	Rails    Division	Locomotive    Division	Corporate    Total
Cost of goods sold	$45,200	$30,700
Direct operating expenses	26,800	20,300
Sales	91,600	67,700
Interest expense			$3,000
General overhead			18,300
Income tax			4,000

The income from operations for the Locomotive Division is

a.$16,700

b.$37,000

c.$47,400

d.$67,700

Answer 1