What will happen to the company residual income

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Questions -

Q1. Division M of Mother Earth Co. has a return on investment of 24% and an investment turnover of 1.6. What is the profit margin?

Q2. For what decisions is the manager of a cost center not responsible?

Q3. What is the major shortcoming of using operating income as a performance measure for investment centers?

Q4. As a manager you are presented with a $10,000 investment opportunity that will yield $1,600 in additional operating income. The manager's division is currently operating at 17% ROI. If the company's minimum acceptable return is 15%, what will happen to the company's residual income if the investment is accepted by the manager?

A. It will increase by $1,500

B. It will increase by $1,600

C. It will increase by $100

D. It will increase by $200

Reference no: EM133172647

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