Rail Star Company reported the following results for 2014: Sales $6,000,000 Investment turnover 2.4 Return on investment 10% Given this information, how much is the companys invested capital? a. $2,500,000 b. $1,440,000 c. $600,000 d. None of the above.

QUESTION 2 The following data pertains to the Retail Division of Motor Express: Sales $700,000 Invested capital 200,000 Net operating profit after taxes 49,000 Noninterest-bearing current liabilities 20,000 The minimum rate of return specified by Motor Express is 12 percent and the cost of capital is 8 percent. How much is residual income? a. $33,000 b. $25,000 c. $27,400 d. $34,600