Assume That Division a Has Generated Sales Revenue of $4,550,000

question 106

Multiple Choice

Assume that Division A has generated sales revenue of $4,550,000 and achieved income from operations of $530,000 using $2,800,000 of invested assets.If management desires a minimum rate of return of 15%,the residual income would be:

• A)$110,000.
• B)$152,500.
• C)$79,500.
• D)$530,000.

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Definitions:

Price Floor

A minimum price set by the government or a regulatory body, below which a good or service cannot be sold in the market.

Compact Discs

Optical discs used to store digital data, primarily known for storing music recordings in a digitally encoded format.

Surplus

A condition in which the amount of a good offered for sale by producers is greater than the amount that buyers will purchase at the existing price. A decline in price would eliminate the surplus.

Waiting In Line

This concept relates to the experience of standing or waiting in a sequence for services or goods, often analyzed in queue theory.