Data for March for Lazarus Corporation and Its Two Major

question 222

Multiple Choice

Data for March for Lazarus Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $156, 000 and were allocated as follows: $84, 000 to the North business segment and $72, 000 to the South business segment. A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

• A)-$109, 000
• B)$203, 000
• C)$293, 000
• D)$47, 000

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Definitions:

CCA Class

Refers to the Canada Revenue Agency's categorization of depreciable properties for the purpose of determining their depreciation rate for tax purposes.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the time value of money and risk.

NPV

Net Present Value: a capital budgeting technique that assesses the profitability of a proposed investment or project.

CCA Rate

Capital Cost Allowance Rate, which is the rate at which businesses in Canada can claim depreciation on certain assets for tax purposes.