Question: Lambda Division had the following information: Asset base in Lambda Division $400,000 Net income in Lambda Division $ 50,000 Weighted average cost of capital 12%

Lambda Division had the following information:

Asset base in Lambda Division $400,000
Net income in Lambda Division $ 50,000
Weighted average cost of capital 12%
Target ROI 15%
Margin for Lambda Division 20%

What is the residual income for Lambda Division?

a.$7,500

b.$48,000

c.$60,000

d.$(10,000)

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