1985, Inc. operates three geographic regions: The Color Purple, The Goonies, and The Breakfast Club. Each region is considered an investment center for 1985. The following data was reported for the year just ended: Operating Income Sales Revenue Invested Assets ---------------------- 57,790 $23,600 $29,962 The Color Purple The Goonies $3,050 $16,160 $15,482 The Breakfast Club $1,970 $5,020 $15,335 QUESTION 1: Match the region with the appropriate return on investment. Clear All The Color Purple 26.0% The Goonies 19.7% The Breakfast Club 12.8% QUESTION 2: Which of the following statements is incorrect for The Color Purple? For every dollar of assets invested in the region, $0.26 of operating income is earned. For every dollar of assets invested in the region, $0.79 of sales revenue is generated. The region's investment turnover is greater than 1. The region's profit margin percentage is higher than its return on investment. For every dollar of sales revenue generated by the region, $0.33 of operating income is earned. QUESTION 3: 1985's minimum acceptable rate of return on investment's is 12%. regions would have a negative residual income. QUESTION 4: Continue to assume the company's minimum acceptable rate of return is 12%. An investment opportunity requiring a $10,000 investment has been identified by the company. The investment is expected to earn $1,250. Which of the following statements is correct? If the managers of each region receive a bonus based on their ability to exceed their prior period's ROI, only the manager of The Breakfast Club would accept the investment opportunity The investment's profit margin percentage is 12.5%. Using ROI as the performance evaulation tool would ensure goal congruence is achieved. If the investment opportunity is accepted by The Color Purple, its residual increase will increase by $50. More than one of the above statements is correct