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The Sunny Division of Miami Corporation Reported the Following Results

Question 138

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The Sunny Division of Miami Corporation reported the following results from the past year. Shareholders require a return of 10%. Management calculated a weighted-average cost of capital (WACC) of 5%. Sunny's corporate tax rate is 30%. The Sunny Division of Miami Corporation reported the following results from the past year. Shareholders require a return of 10%. Management calculated a weighted-average cost of capital (WACC) of 5%. Sunny's corporate tax rate is 30%. What is the division's Residual Income (RI) ? A) $70,000 B) $77,500 C) $100,000 D) $250,000 What is the division's Residual Income (RI) ?


A) $70,000
B) $77,500
C) $100,000
D) $250,000

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