Answer:
$2,400
Explanation:
Calculation for the residual income for Hisjum631 for the period
First step is to calculate the ROI Using this formula
ROI = Net operating income ÷ Average operating assets
Let plug in the formula
0.22 = Net operating income ÷ $40,000
Net operating income = 0.22× $40,000
Net operating income = $8,800
Now let calculate the Residual income using this formula
Residual income = Net operating income − (Average operating assets × Minimum required rate of return)
Let plug in the formula
Residual income= $8,800 − ($40,000 × 0.16)
Residual income= $8,800 − $6,400
Residual income= $2,400
Therefore the residual income for Hisjum631 for the period (closest to) $2,400
