The Labrador Falls Company has three divisions: A Division, B Division, and C Division. A B CSales$320,000 $540,000 ? Net operating income 60,000 ? $24,000 Residual income ? 36,000 14,400 Average Division Assets ? ? 80,000 Cost of Capital 12% 16% ? Profit Margin 20% 5% ? Asset Turnover ? 4.0 ? Return on investment 15% ? ? What was A Division's residual income last year?
A. $30,000.
B. $48,000.
C. $12,000.
D. $22,500.
Answer: C
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