Home Decor Inc., manufactures home cleaning products. The company has two divisions, Bleach and Cleanser. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 2018:
ASSETSINCOME
The company is currently using a 15% required rate of return.
What are Bleach's and Cleanser's residual incomes based on book values, respectively?
A) $83,750; $63,500
B) $125,000; $71,750
C) $63,500; $83,750
D) $71,750; $125,000
Correct Answer:
Verified
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