Roy Toys, a division of Fun Corp. has a net operating income of $60,000 and average operating assets of $300000. 1. The required rate of return for the company is 15%. What is the division's ROI? a. 25% b. 5% c. 15% d. 20% 2. If the manager of the division is evaluated based on ROI, will she want to make an investment of $100000 that would generate an additional net operating income of $18000 per year? a. Yes b. No
Roy Toys, a division of Fun Corp. has a net operating income of $60,000 and average operating assets of $300000. 1. The required rate of return for the company is 15%. What is the division's ROI? a. 25% b. 5% c. 15% d. 20% 2. If the manager of the division is evaluated based on ROI, will she want to make an investment of $100000 that would generate an additional net operating income of $18000 per year? a. Yes b. No
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Roy Toys, a division of Fun Corp. has a net operating income of $60,000 and average operating assets of $300000.
1. The required
a. 25%
b. 5%
c. 15%
d. 20%
2. If the manager of the division is evaluated based on ROI, will she want to make an investment of $100000 that would generate an additional net operating income of $18000 per year?
a. Yes
b. No
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