Richard's Division of Richard and Sons has the following data related to a particular period:

Average invested capital1740750

Imputed interest rate10%

Revenues1259172

Variable costs344975

Fixed cost related solely to the division264954

Calculate the return on investment for the period.

Select one:

a. 373%

b. Always the same as the imputed interest rate

c. 72%

d. 37

The following are the expected quality costs for a firm for a selected period.

Line inspections1,000

Normal spoilage identified500

Design engineering20,000

Returned goods4,000

Customer problems and complaints3,000

Rework of faults identified during testing5,000

Preventive maintenance5,000

Product liability claims30,000

Incoming materials inspection1,500

Breakdown maintenance2,000

Product-testing labour6,000

Quality training4,000

Supplier evaluations (to ensure quality suppliers are selected)2,000

The total appraisal cost was:

Select one:

a. 11,000

b. 8,500

c. 10,500

d. 9,000

Braham Farms has a return on investment of 15 per cent. A Braham division, which currently has a return on investment of 13 per cent and 375,000 of residual income, is contemplating a large investment that will (1) reduce divisional return on investment and (2) produce residual income of 60,000. If Braham strives for goal congruence, the investment:

Select one:

a. should be approved because it produces 60,000 residual income for the division.

b. should not be approved because it reduces divisional return on investment.

c. should be approved because, after acquisition, the division's return on investment and residual income are both positive numbers.

d. should not be approved because the division's return on investment is less than the corporate return on investment before the investment is considered