Calculate new residual income if sale increase profit margin

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Question 1: Reeves Corp. has revenues of $800,000 resulting in an operating profit of $64,000. Invested assets total $1,200,000. Residual income is $40,000. Calculate the new residual income if sales increase by 15% and the profit margin and invested assets remain the same.

Select one:

Option a. $49,600

Option b. $23,400

Option c. $46,000

Option d. $0

Reference no: EM132550689

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