Nation Media has two divisions which operate autonomously. Their results for the past year were as...

 

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Nation Media has two divisions which operate autonomously. Their results for the past year were as follows: Mombasa $5,000,000$6,000,000 Nairobi Sales Contribution margin 2,500,000 3,000,000 Operating income Investment base (total assets) 2,000,000 3,500,000 6,500,000 7,500,000 The company's desired rate of return is 15%. What are the respective residual incomes for the Mombasa and Nairobi divisions? A) $1,075,000; $1,125,000 B) $2,375,000; $1,025,000 C) $1,025,000; $1,125,000 A) $1,075,000; $1,125,000 B) $2,375,000; $1,025,000 C) $1,025,000; $1,125,000 D) $975,000; $1,125,000 E) $1,025,000; $2,375,000 Nation Media has two divisions which operate autonomously. Their results for the past year were as follows: Mombasa $5,000,000$6,000,000 Nairobi Sales Contribution margin 2,500,000 3,000,000 Operating income Investment base (total assets) 2,000,000 3,500,000 6,500,000 7,500,000 The company's desired rate of return is 15%. What are the respective residual incomes for the Mombasa and Nairobi divisions? A) $1,075,000; $1,125,000 B) $2,375,000; $1,025,000 C) $1,025,000; $1,125,000 A) $1,075,000; $1,125,000 B) $2,375,000; $1,025,000 C) $1,025,000; $1,125,000 D) $975,000; $1,125,000 E) $1,025,000; $2,375,000

Answer rating: 100% (QA)

Solution The correct answer is E Explanation For Mombasa ... View the full answer