Imputed interest rate for evaluating


A company uses residual income to evaluate their Div. performance. The Div. had operating profit of $1,000,000 and invested capital of $20,000,000. The imputed interest rate for evaluating a Div. is set at 6%. The residual income for the Div. is

A) $60,000

B) $1,200,000

C) $200,000

D) $200,000

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Accounting Basics: Imputed interest rate for evaluating
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