1..Roanoke inc. total assets amount $70,000. $40,000 of Roanoke's assets are used by the metals division. The company's requires rate of return is at 9%. Last year, Metals division reported sales revenue of $30,000 and Operating Expenses $25,000. the Metals division plan has an opportunity to invest in a new project that is estimated to have a return on investment of 10%. First, compute the return in investment (ROI) and the residual income (RI) for the Metals division based on last years performance. then , assume the manager of metals division is a 100% self interested individual, answer whether the manager would choose to invest in a new project if they are paid bonus based on solely on each performance measure

ROI ------------------------- ROI : choose to invest in new project? yes/ no

RI----------------------------- RI: choose to invest in new project? yes/no

2..over the past few years, physical therapy associates labor expenses have increase significantly. you are the CFO, and believe that some of the increase is caused by the performance of tow part-time employees at one of the practices' s locations that process its Medicare claims paperwork. these two employees work at various time during the week and are paid differently ( one has more experience). you ask the office manager to develop a more thorough budget for this labor expense. with input from the two employees, she develop the following budget. expectations/standards for the next year: 8,400 claims processed, $12.50 average wage, 15 minutes per patient. at the end of the year. your office manager comes to you with some good news. the labor costs, as compared to the planning/static budget have come in under budget by $1,610. you are glad to hear this but you would like to understand the news in great details. you ask for some additional information, and your office manger provides you with the following: 8,800 patients actually processed; 1760 hours actually worked. using this information, prepared a full variance analysis that accounts the total variance analysis of $1,610. us the blank below to enter your answer for each of the listed types of variance, and circle whether each variance is favorable or unfavorable

Volume variance $ favorable/unfavorable

price/rate variance$ favorable / unfavorable

efficiency variance$ favorable/ unfavorable

total variance $1,610 favorable