The following information pertains to Milton Company: $$\begin{array} { l l }
\text { Total assets } & \$ 150,000 \
\text { Total current liabilities } & 110,000 \
\text { Total expenses } & 160,000 \
\text { Total liabilities } & 115,000 \
\text { Total revenues } & 180,000
\end{array}$$ If invested capital is defined as total assets minus current liabilities, a project earning an ROI of 30% should be:
A) rejected
B) accepted
C) rejected if the cost of capital is less than 30%
D) rejected if the desired rate of return is greater than 30%

Question

The following information pertains to Milton Company: $$\begin{array} { l l } 
\text { Total assets } & \$ 150,000 \
\text { Total current liabilities } & 110,000 \
\text { Total expenses } & 160,000 \
\text { Total liabilities } & 115,000 \
\text { Total revenues } & 180,000
\end{array}$$ If invested capital is defined as total assets minus current liabilities, a project earning an ROI of 30% should be:
A) rejected
B) accepted
C) rejected if the cost of capital is less than 30%
D) rejected if the desired rate of return is greater than 30%

Quizplus · Accepted Answer

The Answer of The following information pertains to Milton Company: $$\begin{array} { l l } 
\text { Total assets } & \$ 150,000 \
\text { Total current liabilities } & 110,000 \
\text { Total expenses } & 160,000 \
\text { Total liabilities } & 115,000 \
\text { Total revenues } & 180,000
\end{array}$$ If invested capital is defined as total assets minus current liabilities, a project earning an ROI of 30% should be:
A) rejected
B) accepted
C) rejected if the cost of capital is less than 30%
D) rejected if the desired rate of return is greater than 30%

The Following Information Pertains to Milton Company If Invested Capital Is Defined as Total Assets Minus Current