The Labrador Falls Company Has Three Divisions: a Division, B

question 60

Multiple Choice

The Labrador Falls Company has three divisions: A Division, B Division, and C Division.
$\begin{array}{lcc}&\text {A}&\text {B}&\text {C}\\\text { Sales } & \$ 320,000 & \$ 540,000&?\\\text { Net operating income } & 60,000 & ?&\$24,000 \\\text { Residual income } & ? & 36,000&14,400 \\\text { Average Division Assets } & ? & ?&80,000 \\\text { Cost of Capital } & 12 \% & 16 \%&? \\\text { Profit Margin } & 20 \% & 5 \%&? \\\text { Asset Turnover } & ? & 4.0 &?\\\text { Return investment } & 15 \% & ?&?\end{array}$

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What was B Division's return on investment (ROI) last year?

• A) 16.00%.
• B) 20.00%.
• C) 24.00%.
• D) 33.75%.

Explain the use of four-firm concentration ratios in defining monopolistically competitive industries.

Assess how changes in economic policy, like the minimum wage, differentially impact various types of businesses within the same industry.

Understand the basic concepts of monopoly, including the ability of a monopolist to set prices.

Comprehend the conditions and effects of price discrimination under monopoly.