Question: 28 29 30 Consider the following data for three divisions of a conglomerate: Division A Division B Division C 31 Sales $140,000 $180,000 $250,000

28 29 30 Consider the following data for three divisions of a conglomerate: Division A Division B Division C 31 Sales $140,000 $180,000 $250,000 32 Operating Income 5,000 63,000 14,400 33 Operating Assets 20,000 34 Minimum rate of return 10% 35,000 19% 90,000 20% 35 36 37 Each division is provided with an investment opportunity that could produce a 20% ROI. Which division would not accept the investment? 38 39 40 Calculate the residual income for each division. 41 42 43 A B 44 C 45 46

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