Selected Information for Acme Corp -When Calculating Acme's Return on Net Operating Assets in Year

question 75

Multiple Choice

Selected information for Acme Corp.:
$\begin{array}{lrrr}&\text { Year } 1&\text { Year } 2&\text { Year } 3\\\text { Cash } & \$ 1,000 & \$ 1,500 & \$ 1,500 \\\text { Marketable securities } & 8,000 & 2,000 & 2,000 \\\text { Accounts receivable, net } & 2,000 & 3,000 & 2,500 \\\text { Other current assets } & 2,500 & 3,000 & 3,000 \\\text { Property, plant, and equipment } & 4,500 & 6,000 & 7,000 \\\text { Less: accumulated depreciation } & (4,000) & (4,200) & (4,400) \\\text { Goodwill and other intangibles } & 5,000 & 7,500 & 1,000\end{array}$
-When calculating Acme's return on net operating assets in Year 3, which of the following adjustments to the asset base is most appropriate to consider?

• A)Accumulated depreciation adjustment
• B)Intangible asset adjustment
• C)Operating asset adjustment
• D)No asset adjustment

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Definitions:

Price-sensitive Market

A market characterized by consumers who are highly responsive to changes in the price of goods and services.

Pricing Method

The approach or strategy adopted by a company to set the price of its products or services, taking into account costs, value to the customer, market demand, and competition.

Prestige Pricing

A pricing strategy where items are priced higher than their actual value to invoke a sense of exclusivity or luxury.

Demand-oriented

A pricing strategy focused on consumer demand factors; prices are set at levels that are believed to stimulate demand.