Zylex Corporation has multiple factories across the United States. The upper management at Zylex evaluates each factory based on the capital turnover ratio from the DuPont system. The following is information for the factory in Pennsylvania for the past year.

Sales	$	3,600,000
Operating expenses		1,200,000
Total assets (prior to subtracting accumulated depreciation)		8,000,000
Accumulated depreciation		2,000,000

a. Compute the ROI for the Pennsylvania factory using total assets and assets net of depreciation.

b. Find residual income if the company expects a 25 percent return on total assets.

c. Is the Pennsylvania factory performing up to managements expectations?