Assume that Division Blue has achieved a yearly income from operations of $166,000 using $976,000 of invested assets. If management has set a minimum acceptable return of 8%, the residual income is a.$166,000 b.$105,504 c.$70,336 d.$87,920

d.$87,920

Explanation:

Residual Income = Net Income - Cost of Investment

therefore

Residual Income = $166,000 - ($976,000 x 8%)

                            = $87,920

 Required reserve=$36  million

Explanation:

In a fractional banking system, banks are required to maintain  a proportion of  their total deposit for precautionary reasons by banking authority.

The proportion is known as the required reserve ratio and is always given as a percentage of the total deposit.

The required reserve = required reserve (%) × Total deposit

                                  = 12%× 300 million

                                   =36  million

 Required reserve=$36  million