Items 1 and 2 are based on the following information:
The following are selected data for Lenley Manufacturing Company for the year ended 20X1.
|
Sales |
$30,000,000 |
|
Average invested capital (total assets) |
10,000,000 |
|
Total fixed assets |
6,000,000 |
|
Net income |
3,000,000 |
|
Net cash flow |
5,000,000 |
|
Imputed interest rate |
10% |
Which of the following measures the return on investments for Lenley Manufacturing Company for the year?
- 2%
- 8%
- 10%
- 30%
Which of the following measures residual income for Lenley Manufacturing Company for the year?
- $1,000,000
- $2,000,000
- $3,000,000
- $6,000,000