The Following Information Is Reported for the Current Year for North

question 5

Multiple Choice

The following information is reported for the current year for North Atlantic Division of XT Enterprises: $$\begin{array} { l r } \text { Sales } & \$ 3,800,000 \\\text { Interest expense } & \$ 250,000 \\\text { Net income } & \$ 500,000 \\\text { Total assets } & \$ 5,000,000 \\\text { Noninterest-bearing current liabilities } & \$ 400,000 \\\text { Cost of capital } & 8 \% \\\text { Required rate of return } & 14 \% \\\text { Tax rate } & 30 \%\end{array}$$ How much is the division's return on investment rounded to one decimal?

• A)16.3%
• B)7.1%
• C)14.7%
• D)12.5%

Understand the circumstances under which the Statute of Frauds requires certain contracts to be in writing to be enforceable.

Recognize the principle of the standard construction rule and how courts interpret contracts.

Identify the requirements and legal implications of online and electronic contracts including 'click-on agreements'.

Distinguish between the roles and obligations of parties in contractual agreements such as guarantor, obligor, and administrator of an estate.

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Definitions:

Notes Payable

Short-term or long-term liabilities representing amounts the company owes because it has issued promissory notes.

Accounts Receivable

Receivables by a corporation from its clients for goods or services that have been extended or utilized, yet the corresponding payments are awaited.

Common-base Year Statement

Financial statements that are adjusted to a single point in time or base year, facilitating comparison across different time periods.

Market-to-Book Ratio

A ratio used to compare a company's current market price to its book value.