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Farrell Company has calculated its current return on investment (ROI) to be 10% for the year. This is greater than the company's required 8% return on investment.
Question 1: Which of the following would increase Farrell Company's residual income?
a. Selling an asset with a 9% ROI
b. Buying an asset with a 9% ROI
c. Selling an asset with a 12% ROI
d. Buying an asset with a 6% ROI
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