The Northern Division of the Smith Company had average operating assets totalling $150,000 last year. If the
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Question:
The Northern Division of the Smith Company had average operating assets totalling $150,000 last year. If the minimum required rate of return is 12% and if last year's net operating income at Northern was $20,000, then the residual income for Northern last year was?
a. $20,000
b. $18,000
c. $2,000
d. $5,000
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