Speedy Ltd has an imputed interest rate of 12 per cent. Division Z of Speedy Ltd has invested capital of $800 000 and a return on investment of 15 per cent. What is the residual income?

A) ($24 000)
B) $24 000
C) $96 000
D) None of the given answers

Imputed Interest Rate

The calculated interest rate used in situations where no actual interest rate is specified, often for the purpose of tax calculations or financial analyses.

Residual Income

The income that remains after deducting all required costs of capital from operating income, used to assess the profitability of a department or investment.

Invested Capital

Funds committed into a company by shareholders and debtors, used for operational needs and growth investments.