The Consumer Products Division of Mickolick Corporation had average operating assets of $450,000 and net operating income of $38,700 in August. The minimum required rate of return for performance evaluation purposes is 10%. What was the Consumer Products Division's minimum required return in August?
A)$3,870
B)$38,700
C)$48,870
D)$45,000

Question

Quizplus · Accepted Answer

The minimum required return is calculated by multiplying the average operating assets by the minimum required rate of return. Minimum required return = $450,000 x 10% = $45,000. Therefore, the correct answer is D. Option A is the net operating income, option B is incorrect as it is the same as net operating income, and option C is not a relevant calculation.

The Consumer Products Division of Mickolick Corporation Had Average Operating