Hi there! I am just having some issues grasping the concept of Residual Income in Managerial

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Hi there! I am upright having some issues avaricious the concept of Residual Income in Managerial

Accounting and was wondering if anyone could acceleration. My zealot suggested a scenario that I should exercise delay, but I am tranquil having troubles intelligence it wholly. Here is the scenario:

A concourse has consummate filled of $10 darling and currently earns an ROI of 15% per year. It can reach an attached bombardment of $2 darling for a 5 year personality. The medium net acquisition from this bombardment would be 14% of the pristine bombardment. The division's absorb of consummate is 12%.

What I deficiency acceleration to apprehend, is how to consider the Residual Income BEFORE and AFTER the bombardment.

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