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Managerial Accounting

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Calculating Residual Income: Sassy Wild

MGRACT-STC0QC

Sassy Wild Incorporated sells unique custom tattoos. Sassy's investment information is as follows:

Average operating assets: \$25,000
Controllable (operating) margin: \$5,000
Contribution margin: \$2,000
Required minimum rate of return: 12%

What is Sassy Wild's Residual Income?