Canal Tower Is a Division of Sounder Products

question 60

Multiple Choice

Canal Tower is a division of Sounder Products.For the most recent year, Canal Tower had net income of $16,000,000.Included in income was interest expense of $1,200,000.The operation's tax rate is 40 percent.Total assets of Canal Tower are $225,000,000, current liabilities are $40,000,000, of which $35,000,000 are noninterest-bearing.How much is return on investment for Canal Tower?

• A)8.0%
• B)8.8%
• C)9.1%
• D)7.4%

---

Definitions:

Elixir

A clear, sweet-flavored liquid used in pharmaceuticals as a vehicle for medicinal substances or as a magical potion with curative powers.

Benadryl

An over-the-counter medication known generically as diphenhydramine, used to relieve symptoms of allergy, hay fever, and the common cold.

Decimals

Numerical symbols used in the decimal number system to represent fractions of ten, fundamental in mathematics for expressing precise values.

Mixed Fraction

A whole number and a fraction combined into one “mixed” number.