5. Precious Enterprises had a sales margin of 12%, sales revenue of $10,000,000, and invested capital of $5,000,000. The company's ROI was:

• 12%
• 24%
• 6%
• None of the answers is correct.
• 200%

6. Darrin's Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which has no excess capacity, makes and sells this part for external customers at a variable cost of $23 and a selling price of $42. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $5. On the basis of this information, Southern would establish a transfer price of:

• $18
• $23
• $37
• $42
• None of the answers is correct.