1. Howard has an ROI of 26% based on revenues of $408,000. The investment turnover is 2. What is the residual income if the cost of capital is 15%?
a) $12,440 negative
b) $61,200
c) $22,440
d) $106,080
2. Crawford Corp. has an ROI of 25% and a residual income of $10,500. If operating income equals $50,000, what is the amount of average invested assets?
a) $262,500
b) $42,000
c) $1,250,000
d) $200,000