The current controllable margin for Henry Division is $93000. Its current operating assets are $300000. The division is considering purchasing equipment for $90000 that will increase annual controllable margin by an estimated $12000. If the equipment is purchased, what will happen to the return on investment for Henry Division?

A decrease of 7.1%

A decrease of 12.1%

An increase of 12.9%

A decrease of 4.1%

2.

The following information is available for Halle Department Stores:

Average operating assets	$700000
Controllable margin	68000
Contribution margin	190000
Minimum rate of return	8%

How much is Halles residual income?

$12000

$134000

$632000

$56000

3.

Swifty Corporation had sales of $580000, variable costs of $250000, and direct fixed costs totaling $100000. The companys operating assets total $880000, and its required return is 10%. How much is the residual income?

88000

$162000

$492000

$142000