The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year.Shareholders require a return of 7%.Management calculated a weighted-average cost of capital (WACC)of 5%.Allied's corporate tax rate is 30%.

What is the division's capital turnover?
A)0.47
B)4.00
C)8.57
D)2,50

Question

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year.Shareholders require a return of 7%.Management calculated a weighted-average cost of capital (WACC) of 5%.Allied's corporate tax rate is 30%.

What is the division's capital turnover?

What is the division's capital turnover?
A)0.47 
B)4.00 
C)8.57 
D)2,50

Quizplus · Accepted Answer

A)Sales $700,000 / Total assets 1,500,000 = 0.47

The Box Manufacturing Division of the Allied Paper Company Reported