Q1 The division of a multinational corporation shows sales of $2.1 million, variable cost of sales of $1.3 million, and divisional overheads of $600,000 - 60% of which is deemed controllable by the division and the other 40% is a head office allocation.The profit on which the divisional manager should be evaluated is

Select one:

a.$360,000

b.$440,000

c.$200,000

d.$800,000

Q2 Enrod Company has two divisions: Old and New.Its summary results are

OldNewInvestment$2,000,000$5,000,000Net profit400,000900,000

Enrod's cost of capital is 16%.What is the ROI and RI for Old Division?

Select one:

a.18%; $100,000

b.18%; $80,000

c.20%; $100,000

d.20%; $80,000

Q3 Abbygail Books has two divisions. Edmonton and Toronto, and their results for 2011 were as follows:

EdmontonTorontoSales$5,500,000$7,000,000Cost of goods sold2,000,0002,500,000S&A expenses1,250,0001,900,000Operating income2,250,0002,600,000Investment base (total assets)8,200,0008,700,000

The company's desired rate of return is 22%.

What are the respective return-on-investment ratios for the Edmonton and Toronto divisions?

Select one:

a.27%; 30%

b.5%; 8%

c.None of the above

d.41%; 37%

Q4 During the past year, Labrador Retriever Kennels had a net income of $75,000.Its ROI was 12%.What was the value of the company's total assets?

Select one:

a.$650,000

b.$9,000

c.$625,000

d.$84,000