Author Question: The Tandem division of the Great Adventures Cycles Company had the following results last year (in ... (Read 34 times)

awywial · **on:** Jan 5, 2020

The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands).

Sales	$4,000,000
Operating income	$480,000
Total assets	$2,000,000
Current liabilities	$300,000

Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.

What is the Tandem division's Return on Investment (ROI)?
◦ 24.00%
◦ 200.00%
◦ 7.50%
◦ 12.00%

AaaA · **Reply #1 on:** Jan 5, 2020

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