Answer the Following Questions Using the Information Below:
the Bandage

question 77

Multiple Choice

Answer the following questions using the information below:
The Bandage Medical Supply Company has two divisions that operate independently of one another.The financial data for the year 2017 reported the following results:
$$\begin{array} { l r r } & \text { North } & \text { South } \\\text { Sales } & \$ 3000000 & \$ 2500000 \\\text { Operating profit } & 750000 & 550000 \\\text { Taxable income } & 650000 & 375000 \\\text { Investment } & 6000000 & 5000000\end{array}$$ The company's desired rate of return is 10%.Profit is defined as operating profit.
-What are the respective residual incomes for the North and South Divisions?

• A)$30 000 and $50 000
• B)$50 000 and a negative $150 000
• C)$150 000 and $50 000
• D)$150 000 and $30 000

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Definitions:

Competitive Firms

Enterprises that operate in a market where they have to compete against other firms for the same customers or resources.

Average Revenue

The revenue a firm receives per unit of output sold, calculated by dividing total revenue by the quantity of output.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, holding other factors constant.

Total Revenue

The total receipts or income a firm receives from the sale of its products or services, calculated as the unit price times the quantity sold.