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Managerial Accounting

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Calculating Residual Income: Rising Dawn Industries

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Rising Dawn Industries manages an ambulance service providing transport and emergency care. Rising Dawn's investment information is as follows:

Average operating assets: \$650,000
Controllable margin (operating income): \$8,000
Contribution margin: \$10,000
Required minimum rate of return: 10%

What is Rising Dawn's Residual Income?