Bella Vista Service Co Based on the Above Information, Which One of the Following

question 95

Multiple Choice

Bella Vista Service Co. is a computer service center. For the month of May, Bella Vista Service Co. had the following operating statistics: (CMA adapted)
$$\begin{array} { l r } \text { Sales } & \$ 450,000 \\\text { Operating income } & 25,000 \\\text { Net profit after taxes } & 8,000 \\\text { Total assets } & 500,000 \\\text { Stockholder's equity } & 200,000 \\\text { Cost of capital } & 6 \%\end{array}$$
Based on the above information, which one of the following statements is correct?

• A) Bella Vista Service Co. has a return on investment of 4%.
• B) Bella Vista Service Co. has a residual income of $(2,000).
• C) Bella Vista Service Co. has a return on investment of 5.6%.
• D) Bella Vista Service Co. has a residual income of $(22,000).

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Definitions:

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