Residual Income Calculation for ABC Enterprises

ABC Enterprises is a company that has been generating positive net income consistently over the years. For the current fiscal year, the company reported a net income of $2 million, and its equity capital is $10 million. The required rate of return on equity is 12%. Analysts are using the Residual Income Model to assess the intrinsic value of ABC Enterprises' equity.

To calculate the residual income, analysts will first need to determine the equity charge, which is the product of the equity capital and the required rate of return. Once they calculate the residual income, they can use it to project future residual income for several years and discount it back to present value. The intrinsic value of equity is then derived by adding the present value of projected residual incomes to the current book value of equity.

Given these details, what is the residual income for ABC Enterprises for this fiscal year?