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Given the following data: Return on investment (ROI) would be: A. 5% B. 12% C. 25% D. 60% Koogle Corporation uses residual income to evaluate
Given the following data: Return on investment (ROI) would be: A. 5% B. 12% C. 25% D. 60% Koogle Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 13%. In August, the Commercial Products Division had average operating assets of $530,000 and net operating income of $76, 700. What was the Commercial Products Division's residual income in August? A. -$9, 971 B. -$7, 800 C. $7, 800 D. $9, 971 In a sell or process further decision, which of the following costs is relevant? I. A variable production cost incurred after split-off. II. A fixed production cost incurred prior to split-off A. Only I B. Only II C. Both I and II D. Neither I nor II (Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $28,000 and will have a 6-year useful life and a $4,000 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $32,000 per year. The cost of these prescriptions to the pharmacy will be about $25,000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to: A. 4 years B. 1.8 years C. 2 years D. 1.2 years
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