Calculate the residual income for the Jefferson Division

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Reference no: EM131814227

Question: Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $ 605,000 $ 315,000 Total capital employed 4,000,000 3,250,000 In addition, Washington Company's top management has set a minimum acceptable rate of return equal to 8%.

Required: 1. Calculate the residual income for the Adams Division.

2. Calculate the residual income for the Jefferson Division

Reference no: EM131814227

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