The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year. The total assets of the Beverage Division were $1,680,000, while current liabilities were $360,000. Natural Foods Corporation's target rate of return is 9%, while its weighted average cost of capital is 7%. The effective tax rate for the company is 40%. what is the Beverage Division's Return on Investment (ROI)?
The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year. The total assets of the Beverage Division were $1,680,000, while current liabilities were $360,000. Natural Foods Corporation's target rate of return is 9%, while its weighted average cost of capital is 7%. The effective tax rate for the company is 40%. what is the Beverage Division's Return on Investment (ROI)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Beverage Division of Natural Foods
Corporation had sales of $4,200,000 and
operating income of $840,000 last year.
The total assets of the Beverage Division
were $1,680,000, while current liabilities
were $360,000. Natural Foods
Corporation's target rate of return is 9%,
while its weighted average cost of capital
is 7%. The effective tax rate for the
company is 40%. what is the Beverage
Division's Return on Investment (ROI)?
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