Violet corporation has the following data for the past 2 years

	year 1	year 2
sales	1000	500
return on investments	40%	12.5%
residual income	$ 160	$ 10
required rate of return	?	10%

The sales margin in year 2 is half of the margin in year 1. What is the required rate of return in year 1?

I know the answer is 8%, I need explanation, Please!!!!!