Ringo Corporation had the following results last year (in thousands).Management's target rate of return is 15% and the weighted average cost of capital is 10%.Its effective tax rate is 35%.

What is the division's Return on Investment (ROI)?
A)500.00%
B)20.00%
C)50.00%
D)32.80%

Question

Ringo Corporation had the following results last year (in thousands).Management's target rate of return is 15% and the weighted average cost of capital is 10%.Its effective tax rate is 35%.

What is the division's Return on Investment (ROI)?
A)500.00% 
B)20.00% 
C)50.00% 
D)32.80%

Quizplus · Accepted Answer

C)Operating income 4,000,000/Total assets 8,000,000 = 50%

Ringo Corporation Had the Following Results Last Year (In Thousands)