June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the total expected collections for July?

	$7,975
	$6,825
	$5,525
	$5,975

Question

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7%. Management calculated a weighted-average cost of capital (WACC) of 5%. Allied's corporate tax rate is 30%.

Sales	$700,000
Operating income	$175,000
Total assets	$1,500,000
Current liabilities	$600,000

What is the division's Residual Income (RI)?

	$77,500
	$100,000
	$70,000
	$126,000

Question

The Pasta Division of Whole Grain Corporation had sales of $5,500,000 and operating income of $1,375,000 last year. The total assets of the Pasta Division were $2,750,000, while current liabilities were $330,000. Whole Grain Corporation's target rate of return is 12%, while its weighted average cost of capital is 8%. The effective tax rate for the company is 30%.

What is the Pasta Division's Return on Investment (ROI)?

	6%
	50%
	25%
	200%