Reference: 12-06
the Baily Division Recorded Operating Data as Follows

question 39

Multiple Choice

Reference: 12-06
The Baily Division recorded operating data as follows for the past two years: $$\begin{array} { | l | l | l | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Sales } & ? & \$ 1,200,000 \\\hline \text { Stockholders' equity } & \$ 540,000 & 720,000 \\\hline \text { Average operating assets } & \$ 600,000 & ? \\\hline \text { Margin } & 15 \% & ? \\\hline \text { Return on investment } & 22.5 \% & 18 \% \\\hline\end{array}$$ Baily Division's turnover was exactly the same in both Year 1 and Year 2.
-Suppose a manager's performance is to be measured by residual income. Which of the following will not result in an increase in the residual income figure for this manager, assuming other factors remain constant?

• A)An increase in sales.
• B)A decrease in operating assets.
• C)A decrease in expenses.
• D)An increase in the minimum required rate of return.

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Definitions:

Levator Ani

A broad, thin muscle, situated on either side of the pelvis, which supports the pelvic viscera.

Coccygeus

A muscle located in the pelvic area, involved in supporting the coccyx (tailbone) and controlling movement in the pelvic floor.

Bulbospongiosus

A muscle of the perineum that plays a role in sexual function and urination.

Ischiocavernosus

A muscle that helps stiffen the penis or clitoris during sexual arousal by compressing the base of the erectile tissues.