Winton Company has three divisions.The Florida Division has a 30 percent tax rate, a 4.5 percent cost of capital, and a 7.5 percent required rate of return.During the fiscal year, the division reported sales of $3,920,000.Interest expense was $120,000 and net income was $122,800.The Florida Division has total assets of $2,950,000 and noninterest-bearing liabilities of $150,000.How much is the Florida Division's invested capital?
A)$2,800,000
B)$3,100,000
C)$2,950,000
D)None of these answer choices are correct.

Question

Quizplus · Accepted Answer

Invested capital is calculated as total assets minus noninterest-bearing liabilities. Therefore, for the Florida Division, it is $2,950,000 (total assets) - $150,000 (noninterest-bearing liabilities) = $2,800,000.

Winton Company Has Three Divisions