Reference: 12-07
the Following Selected Data Pertain to the Belt

question 43

Multiple Choice

Reference: 12-07
The following selected data pertain to the belt division of Allen Corp. for last year: $$\begin{array} { | l | l | } \hline \text { Sales } & \$ 500,000 \\\hline \text { Average operating assets } & \$ 200,000 \\\hline \text { Net operating income } & \$ 80,000 \\\hline \text { Turnover } & 2.5 \\\hline \text { Minimum required return } & 20 \% \\\hline\end{array}$$
-How much is the residual income?

• A)$80,000.
• B)$100,000.
• C)$40,000.
• D)$420,000.

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Definitions:

Proportion

A part or share of a whole, often expressed as a ratio or fraction, indicating the relationship in size or amount between parts.

Means

The average that is derived by adding up all the values of a given series and dividing by the number of values.

Teaspoon

A small spoon typically used for measuring or stirring liquids, equivalent to about 5 milliliters in capacity.

Abbreviation

The shortened form of a word or phrase, used to simplify longer terms without losing their meaning.