Tomlinson Tech Has a Cost of Capital of 8 Percent

question 94

Multiple Choice

Tomlinson Tech has a cost of capital of 8 percent, a required rate of return of 9.5 percent, and an income tax rate of 30 percent.The Consumer Division of Tomlinson Tech has assets totaling $2,800,000 and current liabilities at $180,000 with $40,000 of this amount being interest-bearing.Sales for the year totaled $1,900,000 and interest expense totaled $20,000.Net income was $166,500 for the year.How much is the Consumer Division's NOPAT?

• A)$180,500
• B)$172,500
• C)$186,500
• D)$152,500

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Definitions:

Cancerous Cells

Abnormal cells that divide uncontrollably and can invade nearby tissues or spread to other parts of the body.

Bacterial Chromosome

The circular DNA found in bacteria that contains all of the genetic information necessary for cell function and reproduction.

Circular DNA Molecule

DNA that forms a closed loop, found in prokaryotes and in the mitochondria and chloroplasts of eukaryotic cells.

Bidirectionally

In a manner that allows movement or communication in two opposite directions.