Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%.
What is Apple division's return on investment?
A) 11.11%
B) 16.67%
C) 66.67%
D) 60%

Question

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%.
 What is Apple division's return on investment?
A) 11.11% 
B) 16.67% 
C) 66.67% 
D) 60%

Quizplus · Accepted Answer

The Answer is A

Assume the Apple Division of the Gala Company Had the Following