Reference no: EM132604326

Question - Selected information for ABC Company for the past two years appears below:

Year 1

Residual income $3,750

Variable costs 25% of sales

Fixed costs $172,500

Minimum required rate of return 9%

Year 2

Residual income $74,000

Variable costs 60% of sales

Fixed costs $110,000

Minimum required rate of return 16%

Turnover 5

The margin in year 2 was three times larger than the margin in year 1.

Calculate ABC Company's return on investment (ROI) for year 1. Enter your answer as a number (i.e., 40). Do not enter your answer as a decimal (i.e., .40). Also, do not put the % symbol after your answer.