Use the Information Below to Answer the Following Question(s)

question 81

Multiple Choice

Use the information below to answer the following question(s) .Berger Publishing has two divisions which operate autonomously.Their results for the past year were as follows:
The company's desired rate of return is 15%.
-What are the respective residual incomes for the Toronto and Vancouver divisions?

• A)$975,000; $1,125,000
• B)$1,025,000; $1,125,000
• C)$1,025,000; $2,375,000
• D)$2,375,000; $1,025,000
• E)$1,075,000; $1,125,000

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Definitions:

Subsidiary's Equipment

Assets like machinery and tools owned by a subsidiary, which is a company controlled by another parent company.

Consolidation

The process of combining the financial statements of a parent company with those of its subsidiaries, presenting the financial results as if the group of companies was a single entity.

Long-Term Debt

Borrowings and other financial obligations that are due for repayment beyond the next 12 months, usually including bonds, loans, and lease obligations.