1. Given the following data:

Average operating assets	$840,000
Total liabilities	$114,240
Sales	$672,000
Contribution margin	$369,600
Net operating income	$201,600

Return on investment (ROI) would be:

a. 30.0%

b. 24.0%

c. 55.0%

d. 44.0%

2. Given the following data:

Return on investment	30%
Turnover	2.2
Margin	9%
Sales	$220,000
Average operating assets	$66,000
Minimum required rate of return	20%

The residual income would be:

a.$6,600

b.$0

c.$13,860

d.$24,200

3. Cabal Products is a division of a major corporation. Last year the division had total sales of $26,050,000, net operating income of $1,745,350, and average operating assets of $6,512,500. The company's minimum required rate of return is 10%.

The division's margin is closest to: (Round your answer to 1 decimal place.)

a.6.7%

b.26.8%

c.67.0%

d.25.0%

4. The West Division of Frede Corporation had average operating assets of $647,000 and net operating income of $120,000 in December. The minimum required rate of return for performance evaluation purposes is 20%.

What was the West Division's minimum required return in December?

a.$120,000

b.$129,400

c.$24,000

d.$153,400

5. Last year the Uptown Division of Gorcen Enterprises had sales of $300,000 and a net operating income of $24,000. The average operating assets at Uptown last year amounted to $120,000.

Last year at Uptown the return on investment was:

a.8%

b.12%

c.20%

d.40%

6. The West Division of Frede Corporation had average operating assets of $700,000 and net operating income of $120,800 in December. The minimum required rate of return for performance evaluation purposes is 16%.

What was the West Division's minimum required return in December?

a.$112,000

b.$120,800

c.$131,328

d.$19,328

7. The West Division of Frede Corporation had average operating assets of $700,000 and net operating income of $120,800 in December. The minimum required rate of return for performance evaluation purposes is 16%.

What was the West Division's residual income in December?

a.$8,800

b.($19,328)

c.($8,800)

d.$19,328