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Consider a Particular Division That Earns an After-Tax Profit of $40

Question 5

Multiple Choice

Consider a particular division that earns an after-tax profit of $40 million and has total assets worth $120 million.The residual income of the division is ______ if its required cost of capital is 20%.


A) $16 million
B) $40 million
C) $24 million
D) $8 million

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