The 2017 Income Statement for the East Division of Procter

question 63

Multiple Choice

The 2017 income statement for the East Division of Procter Wells Company is as follows: $\begin{array}{lr}\text { Sales } & \$ 1,800,000 \\\text { Operating expenses } & 1,380,000 \\ \text { Net operating income } & 420,000 \\\text { Interest expense } & 120,000 \\\text { Earnings before taxes } & 300,000 \\\text { Income tax expense }(40 \%) & 120,000 \\\text { Net income } & \$ 180,000 \\\hline\end{array}$ This division's invested capital is $4,000,000.How much is the East Division's return on investment?

• A)6.3%
• B)5.7%
• C)10.5%
• D)7.5%

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Definitions:

Recognition

The act of acknowledging or rewarding a person's achievements, qualities, or skills.

Maslow's Need Hierarchy

A psychological theory proposed by Abraham Maslow that categorizes human needs into a five-tier model, in ascending order from basic to more complex needs.

Productivity

The measure of efficiency of a person, machine, system, etc., in converting inputs into useful outputs.

Non-profit Organization

is an entity that operates for a collective, public, or social benefit, rather than to generate profit for owners or shareholders.