The Following Information Is Available for Sweet Dreams Company What Is Sweet Dreams Company's Return on Investment (ROI)?
A)

question 18

Multiple Choice

The following information is available for Sweet Dreams Company:
$$\begin{array} { l r r } \text { Sales } & \$ 100,000 \\\text { Operating expenses } & \$ 94,000 \\\text { Operating assets } & \$ 40,000 \\\text { Stockholder's equity } & \$ 25,000 \\\text { Cost of capital } & 10 \%\end{array}$$
What is Sweet Dreams Company's return on investment (ROI) ?

• A) 6.0%.
• B) 10.0%.
• C) 15.0%.
• D) 24.0%.

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Definitions:

Compounded Monthly

This is the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a monthly basis.

Mutual Fund

An investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Compounded Monthly

Interest calculation method where the interest is added to the principal balance monthly, leading to compound growth.

Compounded Monthly

Interest on an investment or loan is calculated and compounded every month.