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AFP Certified Treasury Professional CTP Question # 324 Topic 10 Discussion

AFP Certified Treasury Professional CTP Question # 324 Topic 10 Discussion

CTP Exam Topic 10 Question 324 Discussion:
Question #: 324
Topic #: 10

Kensley Biscuit Company Ltd. decides to invest £125,000 in new packaging equipment to help it keep up with increased demand. As a result of this investment, the company’s annual profit improves by £11,763. If Kensley’s cost of capital is 8.25% and its corporate tax rate is 42%, what is its residual income (RI) from the investment?


A.

£842


B.

£970


C.

£1,451


D.

£11,763


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