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Assume That Divisional Income from Operations Amounts to $215,000 and Top

Question 40

Multiple Choice

Assume that divisional income from operations amounts to $215,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000.The residual income for the division is


A) $65,000
B) $215,000
C) $635,000
D) $150,000

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