1.

The following information is given for Aces Corp. for the most recent year.

Sales $2,000,000

Net Operating Income $250,000

Operating Assets $500,000

Minimum required rate of return = 12%

Calculate the residual income for Aces Corp. for the most recent year.

2.

Outdoor Recreation, Inc. makes wooden swing sets. Data concerning three of the company's most popular models appear below.

	Model A	Model B	Model C
Selling price per unit	$2,500	$3,000	$3,500
Variable cost per unit	$1,800	$2,100	$2,700
Gallons of paint per unit	1 gallon	2 gallons	2.5 gallons

A severe shortage of the specific paint required by the company to paint their swing sets has required the company to cut back its production. Which product would be the most profitable use of the limited supply of paint?

	a.	Model B
	b.	Model A
	c.	All models are equally profitable.
	d.	Model C

3.

Opportunity costs are:

	a.	not relevant in decision making.
	b.	relevant in decision making.
	c.	always recorded in accounting records.
	d.	the same as variable costs.

4-

The following information is given for Aces Corp. for the most recent year.

Sales $2,000,000

Net Operating Income $250,000

Operating Assets $500,000

Calculate the ROI for Aces Corp. for the most recent year.