1a) Robichau Inc. reported the following results from last years operations:

Sales	$	6,300,000
Variable expenses		4,930,000
Contribution margin		1,370,000
Fixed expenses		803,000
Net operating income	$	567,000
Average operating assets	$	3,000,000

At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:

Sales	$	1,530,000
Contribution margin ratio		30	% of sales
Fixed expenses	$	306,000

The companys minimum required rate of return is 20%.

The residual income for this year's investment opportunity when considered alone is closest to:

Garrison 16e Rechecks 2018-08-12

Multiple Choice

a) ($27,000)

b) $153,000

c) $179,100

d) $0

1b)

Babak Industries is a division of a major corporation. Last year the division had total sales of $19,560,000, net operating income of $1,877,760, and average operating assets of $6,000,000.

The division's turnover is closest to:

Multiple Choice

a) 3.26

b) 10.42

c) 0.31

d) 2.48