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Author Question: Care Inc., has two divisions that operate independently of one another. The financial data for the ... (Read 30 times)

mwit1967

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Question 1

Bouvous Corporation had the following information for 2015:
Revenue$400,000
Operating expenses350,000
Total assets530,000

What is the return on investment?
◦ 9.4%
◦ 75.5%
◦ 8.6%
◦ 10.4%

Question 2

Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results:

NorthSouth
Sales$6,000,000$5,000,000
Operating income1,900,0001,600,000
Taxable income1,600,000750,000
Investment16,000,00010,000,000

The company's desired rate of return is 10%. Income is defined as operating income.
What are the respective return-on-investment ratios for the North and South Divisions?
◦ 16.00% and 11.88%
◦ 10.00% and 7.50%
◦ 11.88% and 16.00%
◦ 7.50% and 10.00%


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Marked as best answer by mwit1967 on Mar 6, 2021

JaynaD87

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mwit1967

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it


emsimon14

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Reply 3 on: Yesterday
Excellent

 

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