(Chapter 11) A company's current net operating income is $16,800 and its average operating assets are $80,000. The company's required rate of return is 18%. A new project being considered would require an investment of $15,000 and would generate annual net operating income of $3,000. What is the residual income of the new project? 20.8% O b 20% C. ($150) O d. $300 QUESTION 2 The use of return on investment (ROl) as a performance measure may lead managers to reject a project that would be favorable for the company as a whole. True False QUESTION 3 A cost that differs between alternatives in a decision is: O 1. an avoidable Cost O 2. a differential cost O3. a relevant cost O 4. all of the above