Cornwall Company Has Two Divisions, a and B What Is the Residual Income for A?
A)$25,000
B)$28,000
C)$15,000

question 36

Multiple Choice

Cornwall Company has two divisions, A and B. Information for each division is as follows: $\begin{array}{lrr}&A&B\\\text { Net earnings for division } & \$ 40,000 & \$ 260,000 \\\text { Asset base for division } & \$ 100,000 & \$ 1,200,000 \\\text { Target rate of return } & 15 \% & 18 \% \\\text { Margin } & 10 \% & 20 \% \\\text { Weighted average cost of capital } & 12 \% & 12 \%\end{array}$ What is the residual income for A?

• A)$25,000
• B)$28,000
• C)$15,000
• D)$40,000

---

Definitions:

One-way ANOVA

A statistical test that compares the means of three or more independent groups to determine if there is a significant difference among them.

Dependent Variable

In an experiment, it is the variable that is being tested and measured, expected to change as a result of modifications to the independent variable.

Television Viewing

The act of watching content on a television set or through television channels.

Squares Total

The sum of squared differences between each observation and the overall mean of the data set. It is a measure of total variation within a data set.