The following information relates to the Quilt Division of TDS Corporation for last year: Sales $200,000 Contribution margin $90,000 Net operating income $65,000 Average operating assets $500,000 Minimum required rate of return 10% Assume that Quilt was being evaluated solely on the basis of residual income. Which of the following investment opportunities would Quilt want to invest in? (I) An investment that generates a return of 12% (II) An investment that generates a return of 16%
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