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John Locke is a manager of one of the investment centers of All Good, Inc. Last year, John's division generated income of $600,000, sales revenue
John Locke is a manager of one of the investment centers of All Good, Inc. Last year, John's division generated income of $600,000, sales revenue of $5,000,000, and had capital invested of $2,000,000. Assuming the hurdle rate is 20%, which of the following statements is correct?
John could improve their division's return on investment by increasing costs.
Residual income for John's division is $200,000.
For each dollar invested in John's division, $0.12 of income is generated.
For each dollar of capital invested, $30 of sales revenue are generated.
For each dollar of sales revenue generated, S0.30 of income is earned.
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