Washington company has two divisions: the adams division and the jefferson division. the following information pertains to last year's results: adams division jefferson division net (after-tax) income $ 605,000 $ 315,000 total capital employed 4,000,000 3,250,000 in addition, washington company's top management has set a minimum acceptable rate of return equal to 8%. required: 1. calculate the residual income for the adams division. $ 2. calculate the residual income for the jefferson division

Explanation:

Adams division:

Net income - 605000

Minimum acceptable income = [Total capital employed*Rate of return] = 4000000*0.08=320000

Residual income= NI-Minimum acceptable income=605000-320000=285000

Jefferson division:

Net income - 315000

Minimum acceptable income = [Total capital employed*Rate of return] = 3250000*0.08=260000

Residual income= NI-Minimum acceptable income= 315000-260000= 55000

15

explanation:

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.