New-2161-Week-9-Homework-Template-1 - a b c d e Investment center Investment center Revenue center Profit center Cost center Margin = Operating Income /

aInvestment centerbInvestment centercRevenue centerdProfit centereCost center

Margin = Operating Income / SalesTurnover = Sales / Average Operating AssetsReturn on Investment (ROI) = Margin x TurnoverPart 1Year 1Year 2Operating Income*givenSales*givenMargin (Operating Income / Sales)Sales*givenAverage Operating Assets*givenTurnover (Sales / Average Operating Assets)Part 2Return on Investment (ROI) [Margin x Turnover]

Residual Income = Operating income - (Minimum rate of return x Average operating assets)Part 1Operating incomeMinimum rate of returnAverage operating assetsResidual incomePart 2Was the ROI for the Tuxedo Division greater than, less than, or equal to 7 percent?

Part 1Who set the maximum transfer price?Who set the minimum transfer price?

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