Standard Media Has a Required Rate of Return of 5

question 135

Multiple Choice

Standard Media has a required rate of return of 5 percent, a cost of capital of 4 percent, and an income tax rate of 30 percent. The following information about its two divisions has been provided by management: $\begin{array}{lrr}&\text { Audio Division }&\text { Video Division }\\\hline\text { NOPAT } & \$ 1,400,000 & \$ 2,000,000 \\\text { Sales } & \$ 10,000,000 & \$ 12,500,000 \\\text { Invested capital } & \$ 15,000,000 & \$ 17,500,000\end{array}$ How much is the residual income of the Audio Division?

• A) $600,000
• B) $650,000
• C) $800,000
• D) $2,000,000

---

Definitions:

Drug Half-life

The drug half-life is the time required for the concentration of a drug in the body to be reduced by half, reflecting the drug's duration of action.

Drug Potency

A measure of drug activity expressed in terms of the amount required to produce an effect of given intensity.

Maximum Level

The highest allowable or achievable level within a specified context.

Half-life

The period required for the concentration or amount of a particular substance to decrease by half, applied in various contexts such as radioactive decay and pharmacokinetics.