The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).

Management's target rate of return is 12% and the weighted average cost of capital is 9%.
What is the Top Hat Division's Return on Investment (ROI)?

Question

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).

Management's target rate of return is 12% and the weighted average cost of capital is 9%.
What is the Top Hat Division's Return on Investment (ROI)?

Quizplus · Accepted Answer

A)
ROI = Operating income/Total assets
= 675,000/3,000,000
= 22.5%

The Top Hat Division of Blandon's Fine Menswear Had the Following