Answer the following question(s)using the information below:
Carriage Ltd.manufactures baby carriages.The company has two divisions, Wheels and Assembly.Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures.The following information is provided for the year just ended:
The company is currently using a 12% required rate of return.
-What are Wheels and Assembly Divisions' return on investment based on book values, respectively?
A)0.21; 0.25
B)0.25; 0.21
C)0.14; 0.29
D)0.29; 0.14
E)0.33; 0.23

Question

Answer the following question(s)using the information below:
Carriage Ltd.manufactures baby carriages.The company has two divisions, Wheels and Assembly.Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures.The following information is provided for the year just ended:
  The company is currently using a 12% required rate of return.
-What are Wheels and Assembly Divisions' return on investment based on book values, respectively?
A)0.21; 0.25 
B)0.25; 0.21 
C)0.14; 0.29 
D)0.29; 0.14 
E)0.33; 0.23

Quizplus · Accepted Answer

The return on investment (ROI) is calculated by dividing the net income by the book value of the investment. The correct values for Wheels and Assembly Divisions' ROI based on book values are 0.25 and 0.21, respectively.

Answer the Following Question(s)using the Information Below