Question: 2 14 Meade Corp has the following operating data for the past 2 years: Year 1 Year 2 Return on Investment 10% 20 Residual Income

2 14 Meade Corp has the following operating data for the past 2 years: Year 1 Year 2 Return on Investment 10% 20 Residual Income $25,000 Required Rate of return 890 10 Sales $400,000 $500,000 Asset Tumover Ne sales margin in year 2 is twice the margin for the first year. The Company had the same asset tumover in both years. What is the residual income in year 1? A. $4,000 B. $8,000 C. $10,000 D. SI2,000 E. None of the above

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