Please help me solve these two Questions. I don't have much time and questions to ask.

1)Which of the following statements regarding cost centers is incorrect?

Cost centers are units within a business that incur expense, but do not have responsibility for generating revenue.

Cost centers tend to be found at upper levels on a company's organization chart.

A manager of a cost center has less responsibility than a manager in an investment center.

Cost center managers are evaluated on their ability to control costs and keep within budget.

2)

Kerston Company has operating assets of $20,000,000. The companys operating income for the most recent accounting period was $1,600,000. The Dannica Division of Kerston controls $8,000,000 of the companys assets and earned $720,000 of its operating income. Kerstons desired ROI is 7 percent. Kerston has $600,000 of additional funds to invest. The manager of the Dannica division believes that his division could earn $51,000 on the additional funds. The highest investment opportunity to any of the companys other divisions is 7.50 percent.

Required

Calculate the ROI of Dannica Division.

(1) Before investment opportunity.

(2) Only on the new investment opportunity.

(3) Dannica total ROI if investment opportunity is accepted.

Calculate the Dannica Division residual income from the new investment opportunity. If residual income is used as the sole performance measure would the manager of the Dannica Division be likely to accept or reject the additional funding?

Complete this question by entering your answers in the tabs below.

Required A

Calculate the ROI of Dannica Division. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)

(1) Before investment opportunity. (2) Only on the new investment opportunity. (3) Dannica total ROI if investment opportunity is accepted.

Show less

	ROI
(1)		%
(2)	8.50	%
(3)		%

Required C

Calculate the Dannica Division residual income from the new investment opportunity. If residual income is used as the sole performance measure would the manager of the Dannica Division be likely to accept or reject the additional funding?

Residual income
Will Dannica Division accept or reject the additional funding?