Fabulous Motor Company makes electric cars and has two products, the Simplegreen and the Fabulousgreen. To produce the Simplegreen, Fabulous Motor employed assets of $11,250,000 at the beginning of 2020 and $4,790,000 of assets at the end of 2020. Other costs to manufacture the Simplegreen include the following: (Click the icon to view the other costs.) Read the requirements Requirement 1. Assuming that Fabulous Motor defines investment as average assets during the period, what is the return on investment for the Simplegreen division? Begin by calculating Simplegreen's operating income. Sales revenue Less Direct materials Setup Production Gross margin Selling and administration Operating income 13 Direct materials Setup Production $2,000 per unit $800 per setup-hour $290 per machine-hour General administration and selling costs for Simplegreen total $6,230,000 in 2020. During the year, Fabulous Motor produced 16,000 Simplegreen cars using 5,000 setup-hours and 178,500 machine-hours. It sold these cars for $6,000 each. A dofi Requirements 1. Assuming that Fabulous Motor defines investment as average assets during the period, what is the return on investment for the Simplegreen division? 2. Calculate the residual income for Simplegreen if Fabulous Motor has a required rate of return of 8% on investments. 13