$\begin{array}{lr}\text { Sales } & \$ 185,000 \\\text { Operating income } & \$ 60,000 \\\text { Operating assets } & \$ 375,000\end{array}$

question 105

Multiple Choice

$\begin{array}{lr}\text { Sales } & \$ 185,000 \\\text { Operating income } & \$ 60,000 \\\text { Operating assets } & \$ 375,000\end{array}$ The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income. The company's minimum rate of return is 14%.
-Refer to Figure 12-2. What is the residual income for Stock Division with the additional project?

• A) $40,000
• B) $6,000
• C) $7,900
• D) $4,200
• E) $25,600

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Definitions:

ERISA

The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Employee Retirement Income Security Act

A federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Acronym

A word formed from the initial letters of other words.

Implied Covenant

A legal concept that infers certain promises or conditions in a contract even though they are not expressly stated.