Mesopotamian Materials Inc *Net Income Is After Tax but Before Interest
MMI's Weighted

question 11

Multiple Choice

Mesopotamian Materials Inc.(MMI) has two decentralized divisions (Ur and Babylon) that have decision making responsibility over the amount of resources invested in their divisions.Recent financial extracts for both divisions are presented below: $\begin{array}{c}\begin{array}{lll}\\\text {Fixed assets, gross}\\\text {Accumulated depreciation}\\\text {Other assets}\\\text {Liabilities}\\\text {Sales}\\\text {Net income after tax*}\\\text {Average age of fixed assets (years) }\end{array}\begin{array}{rr}\text {Ur}\\\$ 2,500 \\\$ 1,500 \\\$ 500 \\\$ 500 \\\$ 6,750 \\\$ 743 \\ 15 \end{array}\begin{array}{l}\text {Babylon:}\\\$ 4,000 \\\$ 1,200 \\\$ 750 \\\$ 1,000 \\\$ 7,200 \\\$ 1,008\\5\end{array}\end{array}$
*Net income is after tax but before interest
MMI's weighted average cost of capital (WACC) is 11.5%.The MMI measures division performance based on the book value of net assets.The producer price index 15 years ago was 100,116 five years ago,and currently is 125.
Using historical costs,which is true?

• A)Ur's return on sales (net income percentage)is 14%
• B)Ur's return on net assets (RONA)is 74%
• C)Babylon's net asset turnover is 6.75
• D)Babylon's return on assets (ROA)is 40%
• E)None of the choices are correct

Grasp the implications of partnership agreements on partner authority, liability, and decision-making processes.

Understand the role and significance of fluorescent dyes in DNA sequencing.

Demonstrate knowledge of primer design and its implications for DNA sequencing.

Differentiate between the techniques used in high-throughput DNA sequencing and their applications.

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Definitions:

Maximize Net Operating Income

The objective to increase the difference between operating revenues and operating expenses, enhancing a business's profitability from its core operations.

Fixed Manufacturing Overhead

Consists of manufacturing costs that do not vary with the level of production, such as salaries of supervisors and rent of the factory.

Predetermined Overhead Rate

An estimated overhead rate used to assign expected overhead costs to individual units of production, aiding in budgeting and cost control.

Fixed Manufacturing Expenses

Costs that do not vary with the level of production, such as rent, salaries, and equipment depreciation.