Zorro Company
the Following Information Pertains to the Three Divisions

question 131

Multiple Choice

Zorro Company
The following information pertains to the three divisions of Zorro Company: $\begin{array}{llll}&\text { Division } A &\text { Division } B& \text { Division } C\\\text { Sales } & ? & ? & 1,250,000 \\\text { Net operating income } & \$ 40,000 & \$ 25,000 & \$ 75,000 \\\text { Average operating assets } & 400,000 & ? & ? \\\text { Return on inv estment } & ? & 20 \% & 15 \% \\\text { Margin } & 0.10 & 0.05 & ? \\\text { Turnover } & 1.0 & ? & ? \\\text { Target ROI } & 14 \% & 12 \% & 10 \%\end{array}$
-Refer to Zorro Company. What is the residual income for Division A?

• A) ($36,000)
• B) ($16,000)
• C) $36,000
• D) $45,000

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Definitions:

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