Grayson & Sons,a Local Car Dealership,has Three Separate Divisions: Car

Multiple Choice

Grayson & Sons,a local car dealership,has three separate divisions: car repair,new car sales,and used car sales.The company has decided to implement a new system for evaluating the performance of its three division managers and the bonuses they receive.The following information is available with respect to each division for the current year:
$\begin{array}{lrrr}& \underline{\text { Car Repair} } & \underline{ \text { New Car Sales} }& \underline{\text { Used Car Sales }}\\\text { Operating income } & \$ 2000000 & \$ 8000000 & \$ 3000000 \\\text { Operating assets } & 3000000 & 18000000 & 8000000\end{array}$

In order to receive a bonus,a division manager must have an ROI greater than 50 per cent and residual income in excess of $1 400 000.If management uses a minimum required rate of return of 18 per cent,which division manager(s) would be eligible to receive a bonus?

A) Car repair only
B) New car only
C) Used car only
D) Car repair,new car,and used car