The Eastern Division of Acme, Inc. has operating income of $32,000 on sales revenue of $320,000. Divisional operating assets are $160,000, and management of Acme has determined that a minimum return of 10% should be expected from all investments.

a. Using the DuPont model, calculate Acme's margin, turnover, and ROI.

b. Calculate Acme's residual income

c. Should Acme accept a project that is expected to achieve a 15% ROI if it is being evaluated using residual income?