Data for September for Mossman Corporation and its two major business segments, North and South,
Sales revenues, North
Variable expenses, North
Traceable fixed expenses, North
Sales revenues, South
Variable expenses, South
Traceable fixed expenses, South
In addition, common fixed expenses totaled $316,000 and were allocated as follows: $164,000 to the North
business segment and $152,000 to the South business segment.
The contribution margin of the South business segment is:
Wryski Corporation had net operating income of $159,000 and average operating assets
of $410,000. The company requires a return on investment of 18.80%.
Calculate the company’s current return on investment and residual income.
The company is investigating an investment of $450,000 in project that will generate annual
net operating income of $85,950.
What is the return on investment of the project?
(Round your answer to 2 decimal
places. Omit the "%" sign in your response.)
What is the residual income of the project?
(Negative amount should be indicated
by a minus sign. Omit the "$" sign in your response.)
Should the company invest in this project?