The West Division of ClarieCam Designs Inc. reports current operating income of $200,000 and invested...
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The West Division of ClarieCam Designs Inc. reports current operating income of $200,000 and invested assets of $800,000. The manager of the West Division has the option to purchase a new asset for $100,000. The new asset is expected to increase the West Division's current operating income by $20,000. ClaireCam Designs Inc.'s minimum rate of return is 14%. Compute West Division's residual income, assuming the manager purchases the new asset.
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