1. What advantages can be cited for management calculating the firm's return on capital (ROC) using both the after-tax operating margin and the capital turnover ratio?

I. To provide insight into variables responsible for generating ROC

II. To better understand how effectively the firm's invested capital is being used

III. To assist in determining the firm's expected growth rate

A. I only

B. II only

C. I and II only

D. I and III only

E. II and III only

F. I, II, and III

2. Which of the following can be expected to create value immediately?

I. Reducing operating and/or financing costs

II. Research and development leading to a patent

III. Building a brand name

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

F. None of the above