MC Qu. 77 Cabal Products is a division of a major corporation... Cabal Products

Question

MC Qu. 77 Cabal Products is a division of a major corporation...

Cabal Products is a division of a major corporation. Last year the division had total sales of $13,420,000, net operating income of $1,261,480, and average operating assets of $2,684,000. The company's minimum required rate of return is 15%.

62.7%

9.4%

47.0%

20.0%

Cabal Products is a division of a major corporation. Last year the division had total sales of $13,420,000, net operating income of $1,261,480, and average operating assets of $2,684,000. The company's minimum required rate of return is 15%.

Explanation / Answer

The division's return on investment = Net operating income/Average investments

= $1,261,480/$2,684,000= 47.0%

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