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Compute the residual income for abok division

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Reference no: EM133169372

Question - The following are the results for Abok Division of Sundai Ltd for the year ended 31 January 2020:

$

Sales 480,000

Variable costs 30% of sales

Fixed expenses 15% of sales

Income tax rate 30% (assume all expenses are tax deductible)

Opening net assets $1,000,000

Closing net assets $1,400,000

If the weighted average cost of capital is 10 percent, compute the Residual Income for Abok Division?

Reference no: EM133169372

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