The following information relates to a company's operations for last year.

Sales	$	1,400,000
Variable expenses		680,000
Contribution margin		720,000
Fixed expenses		440,000
Net operating income	$	280,000
Average operating assets	$	875,000

The companys minimum required rate of return is 15%.

1. Calculate last years return on investment (ROI).

2. Calculate last years residual income.