The following data pertain to three divisions of Nevada Aggregates, Inc. The company’s required rate of return on invested capital is 8 percent. Division A Division B Division C Sales revenue ? $ 10,000,000 ? Income $ 400,000 $ 2,000,000 ? Average investment ? $ 2,500,000 ? Sales margin 20 % ? 25 % Capital turnover 1 ? ? ROI ? ? 20 % Residual income ? ? $ 120,000 Required: Suppose Division A’s sales margin increased to 25 percent, while its capital turnover remained constant. Compute the division’s new ROI.

An outside manufacturer has offered to produce 60,000 daks and ship them directly to andretti's customers. if andretti company accepts this offer, the facilities that it uses to produce daks would be idle; however, fixed manufacturing overhead costs would be reduced by 75%. because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. what is andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?

Cash flow is often a problem for small businesses. how can an entrepreneur increase cash flow? a) locate lower-priced suppliers. b) forego sending in estimated tax payments to the irs c) shorten the terms on a bank loan to pay it off more quickly d) sell more low-margin items.

Boone brothers remodels homes and replaces windows. ace builders constructs new homes. if boone brothers considers expanding into new home construction, it should evaluate the expansion project using which one of the following as the required return for the project?