MULTIPLE_CHOICE_EXAMPLES_CHAPTER_10_Solutions

# MULTIPLE_CHOICE_EXAMPLES_CHAPTER_10_Solutions -...

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21. Cabot Company had the following results during June: net operating income, \$2,500; turnover, 4; and ROI, 20%. Cabot Company’s average operating assets were: A) \$50,000 B) \$200,000 C) \$12,500 D) \$10,000 Ans: C ROI = Net Operating Income / Average Operating Assets 0.2 = \$2,500 / Avg Operating assets Avg Operating assets = 12,500 23. The following information relates to last year’s operations at the Paper Division of Germane Corporation: What was the Paper Division’s net operating income last year? A) \$24,300 B) \$29,160 C) \$145,800 D) \$162,000 Ans: B NOI = Required Return * Assets Assets = sales / turnover Assets = 810 000 / 5 Assets = 162,000 NOI = .18 (162,000) = \$29,160 25. The following information relates to last year’s operations at the Bread Division of Rison Bakery, Inc.: What was the Bread Division’s minimum required rate of return last year? The higher the ROI,

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## This homework help was uploaded on 02/19/2009 for the course AEM 3230 taught by Professor Little,j.e. during the Spring '08 term at Cornell University (Engineering School).

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MULTIPLE_CHOICE_EXAMPLES_CHAPTER_10_Solutions -...

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