Care Inc, Has Two Divisions That Operate Independently of One Another

question 131

Multiple Choice

Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results:

The company's desired rate of return is 10%. Income is defined as operating income.
Which division has the best return on investment and which division has the best residual income figure, respectively?

• A) North, North
• B) South, South
• C) North, South
• D) South, North

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Definitions:

Monthly Rates

Interest or other rates measured or applied over a one-month period, commonly used in loans, leases, or savings accounts.

Monthly Rates

Rates recalculated on a monthly basis, often used to express the cost of financing or earning on investments on a monthly timeline.

Annual Rates

Refers to the interest or growth rate over a period of one year.

Annual Rates

Refers to rates that are applied over the course of a year, commonly found in financial contexts like savings or loan interest rates.