Question

Deskin Corporation uses residual income to evaluate the performance of its divisions.

Deskin Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 19%. In February, the CommercialProducts Division had average operating assets of $780,000 and net operating income of $139,800. What was the Commercial Products Division's residual income inFebruary?

a. -$8,400
b. -$26,562
c. $8,400
d. $26,562

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