Consider the Following Data from Two Divisions of a Company

question 137

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 P's residual income (RI) ?

• A)$160,000.
• B)$1,040,000.
• C)$1,060,000.
• D)$1,434,000.
• E)$3,934,000.

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Definitions:

Desired Behavior

The specific actions or reactions that an organization or individual aims to elicit from others.

Employee Indifference

A state where employees show a lack of interest or concern towards their job, responsibilities, or the success of the organization.

Long Lunches

Extended midday breaks from work or obligations, often used informally for relaxation, socializing, or conducting business.

Undesirable Behavior

Undesirable behavior involves actions that are socially unacceptable, disruptive, or harmful, often leading to negative consequences.