Reference no: EM132590908

Selected accounting information for the Anderson Company for the past two years is given below:

Year 1

Residual income ..................... $3,750

Variable costs ...................... 25% of sales

Fixed costs ......................... $172,500

Minimum required rate of return ..... 9%

Year 2

Residual income ..................... $74,000

Variable costs ...................... 60% of sales

Fixed costs ......................... $110,000

Minimum required rate of return ..... 16%

Turnover ............................ 5

The margin in year 2 was three times larger than the margin in year 1.

Question 1: Calculate the following financial metrics:

Sales revenue in year 2
Return on investment in year 1
Return on investment in year 1