NTP Ltd makes

use of considerable debt in its capital structure. For the year 2024, 85% of

the company’s total assets of R450 000 000 were financed with debt capital. The

cost of debt before tax is 7.6%, and the cost of equity capital is 12.5%.  In 2024 NTP’s pre-tax income was R4.9 million,

and they have a tax rate of 42%.

Calculate the residual income of

NTP Ltd for 2024.