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Hi sir can you please help me with this q:
a divisional manager controls asset valued at 600,000. other assets valued at 100000 are traceable to the division but are not controllable by the divisional manager. The controllable profit for the division for a period is 80000. The head office uses an imputed interest rate of 8% in calculating the residual income.
what is the controllable RI for the division?
my answer is 32,000, I ignore the 100,000 bc it is not controllable by the divisional manager..
is it correct?
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