Correll Company Has Two Divisions, a and B What Is the Residual Income for A?
A)£40,000
B)£25,000
C)£15,000

question 1

Multiple Choice

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

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

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Definitions:

Organizational Culture

Organizational Culture is the collective values, beliefs, and behaviors that shape the social and psychological environment of a business, influencing how employees interact and work.

Horizontal Integration

The merger or acquisition of rivals.

Culture

The shared values, beliefs, and behaviors within an organization that influence how employees work and interact.

HRIS

Human Resources Information System; a software or online solution for the data entry, data tracking, and data information needs of the human resources, payroll, management, and accounting functions within a business.