Figure 19-1 Assume the Division's Current ROI Is 10 Per Cent and Project

question 30

Multiple Choice

Figure 19-1 $$\begin{array} { c c c } \text { Project } & \text { Income } & \text { Investment } \\\text { A } & £ 40,000 & £ 800,000 \\\text { B } & 44,000 & 400,000 \\\text { C } & 46,875 & 625,000\end{array}$$ Assume the division's current ROI is 10 per cent and the firm's minimum required rate of return is 6 per cent.
-Refer to Figure 19-1. If you were the division manager and you were evaluated based on ROI, which projects would you accept?

• A)Projects A, B, and C
• B)Projects A and B
• C)Projects B and C
• D)Project B only

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Definitions:

Expense Account

An account used to record individual expenditures or expenses incurred during business operations.

Liability Account

An account recording a company's obligations to pay debts to creditors in the short or long term.

Adjusting Journal Entries

Entries made in accounting records at the end of an accounting period to update accounts for accruals and deferrals that were not recorded during the accounting period.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.