Mike Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 14%. In January, the Commercial Products Division had average operating assets of $970,000 and net operating income of $143,700. What was the Commercial Products Division's residual income in January?

$7,900

Explanation:

Given the following ;

Minimum rate of return = 14%

Average operating asset = $970,000

Net operating income = $143,700

The residual income may be explained as the excess income a person has after deducting all expenses.

However, in the case of Mike Corporation, the residual income is the excess a corporation has after exceeding the minimum rate of return on it's investment.

Mathematically,

RESIDUAL INCOME(RI) =Net income - (minimum rate of return × average operating asset)

RI = $143,000 - (0.14 × $970,000)

RI = $143,700 - $135,800

RI = $7,900

answer; by looking at total product,marginal product,and changes in both after changes in inputs

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.