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Find what are respective residual incomes for west division

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Reference no: EM132986003

Problem 1: The Bookworm Supply Company has two divisions (East and West) that operate independently of one another. The financial data for the year 2020 reported the following results:East- Sales: $3 000 000, Operating Profit:$750 000, Taxable income: 650 000, Investment: 6 000 000. West- Sales: $2 500 000, Operating profit: 550 000, Taxable income: 375 000, Investment: 5 000 000. The company's desired rate of return is 10%. Profit is defined as operating profit. What are the respective residual incomes for the East and West Divisions?

Select one:

a.$150 000 and $30 000
b.$30 000 and $50 000
c.$150 000 and $50 000
d.$50 000 and a negative $150 000

Reference no: EM132986003

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