Cornwall Company Has Two Divisions, a and B What Is the Return on Investment for A?
A)18%
B)40

question 120

Multiple Choice

Cornwall Company has two divisions, A and B. Information for each division is as follows: $\begin{array}{lrr}&A&B\\\text { Net earnings for division } & \$ 40,000 & \$ 260,000 \\\text { Asset base for division } & \$ 100,000 & \$ 1,200,000 \\\text { Target rate of return } & 15 \% & 18 \% \\\text { Margin } & 10 \% & 20 \% \\\text { Weighted average cost of capital } & 12 \% & 12 \%\end{array}$ What is the return on investment for A?

• A)18%
• B)40%
• C)20%
• D)15%

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Definitions:

Demand

The willingness and ability of consumers to purchase goods or services at a given price level.

Supply

The total amount of a good or service available for purchase at any given price level within a specific market.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much of one currency can be exchanged for another.