D is corrent. If asset turnover is equal to 1.5 times, invested assets is equal to $500,000 ($750,000 sales ÷ 1.5 asset turnover). D is corrent because residual income is equal to $0 [($750,000 × 8%) – ($500,000 invested assets × 12%)].
A is incorrect because the solution may be determined by first computing invested assets by dividing sales by asset turnover.
A is incorrect because the solution may be determined by first computing invested assets by dividing sales by asset turnover.
A is incorrect because the solution may be determined by first computing invested assets by dividing sales by asset turnover.
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