Reference no: EM13573351

1. Maxwell Company established a center to provide its employee training seminars. Maxwell budgeted costs for a weekend training seminar for managers at $300 per employee. Actual costs were $315 per employee. The training center would be considered a (an)

a.    asset center.

b.   profit center.

c.    cost center.

d.   investment center.

2. Kennedy Aeronautics desires an 8% ROI on all investment projects. Details of a proposed investment include the following:

Sales Revenues                        $30,000

Expenses                                  27,000

Investment Turnover                1.5

Which of the following statements is accurate?

a.    Based on ROI, the company should accept the investment project.

b.   The investment project would have a 10% return.

c.    The company should reject the investment project.

d.   The company's margin is 14.3%.

3. The accounting records pertaining to a Cassidy Products investment project were recently destroyed by fire. The company accountant was able to recall the following information:

Desired ROI                      12%

Net Income                       $260,000

Residual Income               $20,000

Based on this information, how much is the company's investment in the project?

a.    $225,000

b.   $2,000,000

c.    $1,460,000

d.   $1,875,000

4. The management of Dakota Industries obtained the following information about the performance of a major investment project.

Revenues                                     $200,000

Average Operating Assets            300,000

Net Operating Income                   30,000

Desired ROI                                   10%

The project's residual income was

a.    $30,000.

b.   $10,000.

c.    $0.

d.   10%.