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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
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: ASSETS Book Value Current value $350,000 $320,000 $420,000 $350,000 INCOME Book value Current value $140,000 $170,000 $125,000 $130,000 Bleach Cleanser The company is currently using a 13% required rate of return. What are Bleach's and Cleanser's residual incomes based on book values, respectively? ----- O A. $128,400; $84,500 OB. $70,400; $94,500 OC. $94,500, $70,400 OD. $84,500, $128,400
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