Tropic Corp

question 124

Multiple Choice

Tropic Corp.has sales revenue of $500,000 resulting in operating income of $54,000.Average invested assets total $600,000,and the cost of capital is 6%.Calculate the return on investment if sales increase by 10% and the profit margin and invested assets remain the same.

• A)9.0%
• B)9.9%
• C)10.8%
• D)6.0%

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Definitions:

Board of Directors

A group of individuals elected to represent shareholders and oversee the management and major decisions of a corporation.

Shareholders

are individuals or entities that own shares in a corporation, giving them a stake in the company's ownership and sometimes influencing its governance.

Illegal Dividend

A dividend declared and distributed by a company when it is not legally permissible to do so, either due to financial insolvency or violation of statutory requirements.

Shareholder

An individual or entity that owns shares in a corporation, thereby holding a portion of the company's stock and potentially benefiting from its profits in the form of dividends.