Which of the following is the correct formula for calculating residual income?
A) Weighted average cost of capital - Net operating profit after tax
B) Operating income - Minimum acceptable operating income
C) Historical cost of assets - Accumulated depreciation
D) Operating income / Average assets
B
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Johnson worked for ABC Co. and earned a salary of $100,000. Johnson also received, as a fringe benefit, group term life insurance at twice Johnson's salary. The annual IRS-established uniform cost of insurance is $2.76 per $1,000. What amount must Johnson include in gross income?
a) $100,414 b) $100,000 c) $100,552 d) $100,276
Assuming that a franchise agreement establishes the franchisee as an independent contractor in
relation to the franchisor, the franchisor and franchisee are not liable for each other's torts. Indicate whether the statement is true or false