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Managerial Accounting

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Benjamin Residual Income

MGRACT-4P$G03

The Benjamin Division of Magnascope reported the following results for their most recent year:

Sales \$51,000,000
Net Operating Income \$5,400,000
Average Operating Assets \$30,000,000

$$\\\text{}$$Magnascope's required rate of return is 20%.

What is Benjamin's residual income (RI)?

A

-$600,000

B

$1,080,000

C

$5,400,000

D

$6,000,000