Reference: 22_08 -Fred Smith and Joe Barney Are Managers of Two Product

Multiple Choice

Reference: 22_08
$\begin{array}{lrr}\text { Quarry Co.}&\text { Smith}&\text { Barney}\\\text { Revenue } & \$ 412,000 & \$ 450,000 \\\text { Costs } & 380,000 & 411,000 \\\text { Average assets } & 400,000 & 600,000\end{array}$

-Fred Smith and Joe Barney are managers of two product lines for Quarry Company.One of them is a candidate for promotion based on performance.Using the data above,which of the following is a true statement?

A) Smith is outperforming Barney as measured by return on investment center assets.
B) Barney is outperforming Smith as measured by return on investment center assets.
C) The return in investment center assets is the same for both
D) If target performance is a 7% return on assets, both investment centers are performing above the target level.
E) If target performance is a 7% return on assets, the residual income for both centers is positive.