Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the informationgiven, which of the following statements is correct?O A. For every dollar of sales revenue generated, $0.56 of income is earned.B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%.C. For every dollar of capital invested, $0.20 of income is earned.D. For every dollar of capital invested, $3.63 of income is earned.O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

For every dollar of sales revenue generated, $0.056 of income is earned. ($609,840 / $3,000,000)…

Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the information given, which of the following statements is correct? O A. For every dollar of sales revenue generated, $0.56 of income is earned. O B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%. OC. For every dollar of capital invested, $0.20 of income is earned. O D. For every dollar of capital invested, $3.63 of income is earned. O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

Brutus is a division of Madam Medusa's Pawn Shop/Boutique, Inc. Last year, the division generated operating income of $609,840 and sales revenue of $10,890,000. The division had invested capital of $3,000,000. Using only the information given, which of the following statements is correct? O A. For every dollar of sales revenue generated, $0.56 of income is earned. O B. If the division's manager is evaluated based on maintaining the division's current Return on Investment, he would accept an investment opportunity that would yield a return of 18%. OC. For every dollar of capital invested, $0.20 of income is earned. O D. For every dollar of capital invested, $3.63 of income is earned. O E. If the company's hurdle rate is less than 20%, the residual income for Brutus is negative.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 11E: Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant,...

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