A company reported the following financial information for one of its divisions: average total assets $12,600,000; sales $12,500,000; cost of goods sold $7,500,000; and operating expenses $2,500,000. Assume a target net income of 14% of average invested assets. Compute residual income for the division:

Multiple Choice

• $ 350,000.

• $ 475,000.

• $ 736,000.

• $ 375,000.

• $ 750,000.

A company reported the following financial information for one of its divisions: profit margin 25%; investment turnover 1.6; residual income $ 475,000. Management has a hurdle rate of 10% on all investments. What is the companys ROI?

Multiple Choice

• 52.00%.

• 64.00%.

• 68.00%

• 40.00%.

• 47.00%