Fairpoint Products Provided the Following Selected Information About Its Consumer $\begin{array}{lr}\text { Desired ROI } & 8\% \\\text { Operating income } & \$ 100,000 \\\text { Residual income } & \$ 60,000\end{array}$

question 50

Multiple Choice

Fairpoint Products provided the following selected information about its consumer products division for the current year: $\begin{array}{lr}\text { Desired ROI } & 8\% \\\text { Operating income } & \$ 100,000 \\\text { Residual income } & \$ 60,000\end{array}$ Based on this information, the division's investment amount was:

• A) $500,000.
• B) $1,250,000.
• C) $750,000.
• D) $2,000,000.

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Definitions:

Sales To Investment

A ratio that measures the return on investment by comparing the sales generated to the amount of investment made.

Investment Turnover

A measure of the activity or liquidity of an investment portfolio, indicating how frequently assets within the portfolio are bought and sold.

Return On Investment

A measure of the profitability and efficiency of an investment, calculated as net profit divided by the cost of the investment.

Invested Assets

Assets that have been purchased or acquired for the purpose of generating income or profit, not for immediate resale.