13 Mill Company reported the following results from last year's operations $1,900,000 $550,000 $1,350,000 $875,000 $475,000 Average operating assets $1,187,00 Sales Variable expenses Coetribution mangin Fixed expenses Net operating income This year, the company has a $237,500 investment opportunity with the follonwing costs and revenue: $380,000 50% $133,000 The company's minimum required rate of return is Sales Contribution margin ratio Fixed expenses 15% Which of the following statements is true? A. If Mill's chief executive officer's (CEO's) bonus is based on ROl, then she would parsue the investment opportunity. B. IfMill's CEO's bonus is based on ROl, then she would NOT parsue the investment opportunity because the ROl on the new investment opportunity is less than the company's minimum required rate of return. C. If Mill's CEO's bonus is based on residual income, then she would NOT parsue the investment D. If Mill's CEO's bonus is based on residual income, then she would pursue the investment opportunity E. Regardless how her bonus is deternmined, the CEO would parsue the investment opportunity because it is good for the company 14 Which of the statements below are true? 1 A balanced scorecard consists of a report showing a performance measure such as ROl or residual income for all of the divisions in a company that generate profits 2 If a strategy is not working, it should become evident on the balanced scorecard when some of the predicted effects don't occur Financial measures.tend to be lag indicators that report on the results of past actions. 4 A balanced scorecard contains both customer and internal business process performance measures because improvements in internal business process should result in improvements in customer Financial measures such as ROI are generally better than nonfinancial measures of key success drivers such as customer satisfaction as leading indicators of future financial performance. 5 A. All of them. B. All except 1 C 4 and 5. D. 3 and4 E 2,3, and 4 Page 9 of 16