Search for question
Question

## H11-Q38 ## Clemons, Inc. has three separate divisions as shown below. Operating income Division A $5,062,500 Division B Division C $9,750,000 $1,800,000 Operating assets $7,500,000 $39,000,000 $6,750,000 Each division manager will receive a bonus if the return on investment of the division is greater than 30% and residual income is in excess of $3,000,000. The company uses a cost of capital rate of 14%. Which division manager(s) is eligible for a bonus?

Fig: 1