Reference: 22_08 -Based on the Quarry Company Information,what Is Residual Income for

question 59

Multiple Choice

Reference: 22_08
$\begin{array}{lrr}\text { Quarry Co.}&\text { Smith}&\text { Barney}\\\text { Revenue } & \$ 412,000 & \$ 450,000 \\\text { Costs } & 380,000 & 411,000 \\\text { Average assets } & 400,000 & 600,000\end{array}$

-Based on the Quarry Company information,what is residual income for Smith and Barney?

• A) Smith: $4,000; Barney: $(3,000)
• B) Smith: $(3,000); Barney: $4,000
• C) Smith: $28,000; Barney: $42,000
• D) Smith: $8% ; Barney: 6.5%
• E) Smith: $0; Barney: $0

---

Definitions:

Conglomerate Merger

A combination of two or more corporations engaged in entirely different business activities, coming together to form a single corporate structure.

Integrated Merger

A merger between companies at different stages in the production process of a particular industry, often aimed at reducing costs or securing supplies.

Vertical Merger

A merger between two or more companies operating at different stages in the production process of a good or service.

Horizontal Merger

A merger between companies that operate in the same industry, often leading to consolidation in the market.