The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 9%. Management calculated a weighted average cost of capital (WACC) of 3%. Allied's corporate tax rate is 30%. $700,000 105,000 Sales Operating income Total assets 1,600,000 400,000 Current liabilities What is the division's Return on Investment (ROI)? O A. 57.14% O B. 43.75% O C. 6.56% O D. 15.00%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 9%. Management calculated a weighted average cost of capital (WACC) of 3%. Allied's corporate tax rate is 30%.
$700,000
105,000
Sales
Operating income
Total assets
1,600,000
400,000
Current liabilities
What is the division's Return on Investment (ROI)?
O A. 57.14%
O B. 43.75%
O C. 6.56%
O D. 15.00%
Transcribed Image Text:The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 9%. Management calculated a weighted average cost of capital (WACC) of 3%. Allied's corporate tax rate is 30%. $700,000 105,000 Sales Operating income Total assets 1,600,000 400,000 Current liabilities What is the division's Return on Investment (ROI)? O A. 57.14% O B. 43.75% O C. 6.56% O D. 15.00%
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