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The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).

Sales $ 4,500,000

Operating income $ 675,000

Total assets $ 3,000,000

Current liabilities $ 250,000

Management's target rate of return is 12% and the weighted average cost of capital is 9%.

What is the Top Hat Division's Residual Income (RI)?

a. $ 135,000
b. $ 405,000
c. $ 225,000
d. $ 315,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M944650

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