The Following Information Pertains to Alan Company If Invested Capital Is Defined as Total Assets, the Return

question 86

Multiple Choice

The following information pertains to Alan Company: $$\begin{array} { l r } \text { Total assets } & \$ 100,000 \\\text { Total current liabilities } & 30,000 \\\text { Total expenses } & 60,000 \\\text { Total liabilities } & 35,000 \\\text { Total revenues } & 80,000\end{array}$$ If invested capital is defined as total assets, the return on investment is _____.

• A)160%
• B)60%
• C)70%
• D)20%

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Definitions:

Bondholder

A bondholder is an individual or institution that holds the debt security issued by governments or corporations, entitling them to receive interest payments and the return of principal.

Premium

A Premium refers to the amount paid for a contract of insurance or the amount by which a bond or stock's market value exceeds its face value or par value.

Effective-interest

Another term for the effective interest method, emphasizing the allocation of interest over the life of financial instruments like bonds.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, paid as interest on debt such as loans, bonds, or lines of credit.