1. Alma Inc. has revenues of $750,000 resulting in an operating income of $52,500. Average invested assets total $375,000; the cost of capital is 10%. Return on
investment is A.$37,500 B.7% C.$15,000 D.14% 2. UMUC Corp. has two divisions, Europe and Asia. Europe produces a widget that Asia could use in its production.
Europe’s variable costs are $2 per widget while the full cost is $3.50. Widgets sell on the open market for $6 each. If Europe is operating at capacity, what would
be the maximum transfer price if Asia currently is purchasing 100,000 units on the open market? A. $3.50 B. $2.50 C. $2.00 D. $6.00 3. Remington has an ROI of 18%
based on revenues of $300,000. The investment turnover is 1.5 and residual income is $20,000. What is the hurdle rate? A. 15% B. 12% C.18% D. 8% 4.Chetek Corp. has
an ROI of 15% and a residual income of $10,000. If operating income equals $30,000, what is average invested assets? A. $150,000 B. $450,000 C. $200,000 D. $66,667
investment is A.$37,500 B.7% C.$15,000 D.14% 2. UMUC Corp. has two divisions, Europe and Asia. Europe produces a widget that Asia could use in its production.
Europe’s variable costs are $2 per widget while the full cost is $3.50. Widgets sell on the open market for $6 each. If Europe is operating at capacity, what would
be the maximum transfer price if Asia currently is purchasing 100,000 units on the open market? A. $3.50 B. $2.50 C. $2.00 D. $6.00 3. Remington has an ROI of 18%
based on revenues of $300,000. The investment turnover is 1.5 and residual income is $20,000. What is the hurdle rate? A. 15% B. 12% C.18% D. 8% 4.Chetek Corp. has
an ROI of 15% and a residual income of $10,000. If operating income equals $30,000, what is average invested assets? A. $150,000 B. $450,000 C. $200,000 D. $66,667
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