Duncan Ltd Duncan Requires Each of Its Divisions to Generate a Minimum

question 138

Multiple Choice

Duncan Ltd.has the following information available for one of its divisions in the current year:
$\begin{array}{lr}\text { Sales revenue } & \$ 6000000 \\\text { Operating expenses } & 3800000 \\\text { Average operating assets } & 2000000\end{array}$
Duncan requires each of its divisions to generate a minimum return of 25 per cent.What is this division's residual income?

• A) $ 200 000
• B) $1 450 000
• C) $1 700 000
• D) $5 500 000

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Definitions:

Stressful Situations

Scenarios that cause emotional or physical tension, often requiring coping mechanisms to manage or overcome.

Transactional Leadership

A management style focused on the supervision, organization, and performance; it is based on a system of rewards and punishments.

Transformational Leadership

A leadership style that inspires followers to exceed their own interests for the good of the group or organization, often leading to remarkable levels of achievement.

Transformational Leadership Theory

A leadership approach that causes change in individuals and social systems, aiming to create a vision for change and guide followers towards higher levels of performance and moral standards.