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## H11-Q36 ## Bancroft, Inc. has three separate divisions: Division A, Division B, and Division C. Information about the three divisions follows: Operating income Division A $53,500 Division B Division C $44,800 $242,000 Average operating assets $500,000 $166,000 $824,000 Each division manager will receive a bonus if the return on investment of the division is greater than 25% and residual income is in excess of $40,000. The company uses a cost of capital rate of 18%. Which division manager(s) is eligible for a bonus? Division B and Division C. O Division B only. Division A and Division B. Division C only.

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