Consider the Following Data from Two Divisions of a Company

question 72

Multiple Choice

Consider the following data from two divisions of a company, P and Q:
$\begin{array}{lrrrr}\text { Divisional } &{\mathrm{P}} & \mathrm{Q} \\\text { Sales } & \$ 1,500,000 & \$ 1,000,000 \\\text { Operating Income } & \$ 600,000 & \$ 450,000 \\\text { Investment } & \$ 4,000,000 & \$ 2,750,000\end{array}$
If the minimum rate of return is 11%, what is Division Q's residual income (RI) ?

• A)$147,500.
• B)$490,000.
• C)$752,000.
• D)$950,000.
• E)$1,049,500.

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