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:

Short Words

Words that are brief and direct, often enhancing readability and comprehension in written communication.

Nondiscriminatory Sentence

A sentence in communication that avoids bias, prejudice, or unfair references to gender, race, age, or other personal characteristics.

Millennial Generation

A demographic cohort following Generation X, typically defined as being born from the early 1980s to the mid-1990s to early 2000s.

Precise Language

The use of clear, exact, and accurate terms to convey a message.