Question $16(1$ point$)$

Monster Mash produces Computer Games. Mash's balance sheet indicates $$450,000$ in Operating Assets. Their Operating Income was $$121,500$ from Sales of $$810,000.$

Compute Monster Mash's ROI.

Question $16$ options:

a$)$

$11\%$

b$)$

$18\%$

c$)$

$23\mathrm{.}2\%$

d$)$

$27\%$

Question $17(1$ point$)$

Monster Mash produces Computer Games. Mash's balance sheet indicates $$450,000$ in Operating Assets. Their Operating Income was $$121,500$ from Sales of $$810,000.$

A logical explanation for Monster Mash's high ROI might be

Question $17$ options:

a$)$

Monster uses a lot of assets, making the ROI higher.

b$)$

Monster uses few assets, yet sales and income are high.

c$)$

Although Monster's sales are low, profit and assets are high.

d$)$

Monster should decrease sales to match the assets used.

Question $18(1$ point$)$

Monster Mash produces Computer Games. Mash's balance sheet indicates $$450,000$ in Operating Assets. Their Operating Income was $$121,500$ from Sales of $$810,000.$

Monster Mash's has a desired ROI of $20\%.$ What is Mash's residual income?

Question $18$ options:

a$)$

$$22,500$

b$)$

$$31,500$

c$)$

$$90,000$

d$)$

$$121,500$

Question $19(1$ point$)$

Monster Mash produces Computer Games. The Explosion Division uses $$112,500$ in Operating Assets. Their Operating Income was $$30,375$ from Sales of $$202,500.$ Mash offered the manager of the Explosion Division an opportunity to use new explosive effect software costing $$100,000.$ The ROI of the new software is expected to be $18\%.$ Mash has a desired ROI of $15\%.$

What will the manager of the Explosion Division most likely do assuming s$/$he is evaluated based on ROI? $($hint $-$ calculate current ROI$)$

Question $19$ options:

a$)$

Reduce the amount of assets used in their division.

b$)$

Not invest in the software, even though it will increase divisional ROI.

c$)$

Invest in the new software to increase operating income

d$)$

Suboptimize, choosing not to use the new software.

Question $20(1$ point$)$

The Sultans currently earn $$100,000$ in Net Income using equipment that cost $$500,000.$ Ticket sales are $$800,000.$ Guitar George wants to invest in new guitars costing $$50,000.$ George figures all the chords he plays will attract a new audience and sales will increase to $$1,000,000.$

What is the Sultans current ROI?

Question $20$ options:

a$)$

$20\%$

b$)$

$20\mathrm{.}83\%$

c$)$

$28\%$

d$)$

$29\mathrm{.}33\%$