The Jazz Division of Heights Recording Corporation reported the following results last year: Sales $10,000,000 Operating...
The Jazz Division of Heights Recording Corporation reported the following results last year:
|
Sales |
$10,000,000 |
|
Operating Income |
$2,200,000 |
|
Total Assets |
$4,000,000 |
|
Current Liabilities |
$2,500,000 |
Management's target rate of return is 12% and the weighted average cost of capital is 9%. Its effective tax rate is 32%. Calculate the ROI for the Jazz Division.
A.
22%
B.
12%
C.
88%
D.
55%
Did the Jazz Division earn or exceed the target rate of return?
A.
Yes
B.
No
Homework Answers
ROI = Operating income/Total assets
= 2,200,000/4,000,000
= 55%
Option D is the answer
.
Yes.
Add Answer to:
The Jazz Division of Heights Recording Corporation reported the
following results last year:
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$10,000,000
Operating...
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