Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales $ 37,880,000 Net operating income $ 3,508,960 Average operating assets $ 9,400,000 The company's minimum required rate of return 14 % The division's residual income is closest to:

The division's residual income is closest to $2,192,960

Explanation:

Residual income=net income-(average operating assets*required rate of return)

net operating income is $3,508,960

average operating assets is $ 9,400,000

required rate of return is 14%

residual income =$3,508,960-($9,400,000*14%)

residual income=$3,508,960-$1,316,000

residual income =$2,192,960

The residual income is the residue of net income after deducting an amount equivalent of cost of using the assets of the company funded by finance providers.

the correct choice is a