Naples, Inc How Much Is ROI for the Year If Management Is

question 146

Multiple Choice

Naples, Inc. recorded operating data for its shoe division for the year. $$\begin{array} { l r } \text { Sales } & \$ 750,000 \\\text { Contribution margin } & 135,000 \\\text { Total fixed costs } & 90,000 \\\text { Average total operating assets } & 300,000\end{array}$$ How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

• A) 25%
• B) 18%
• C) 45%
• D) 12%

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Definitions:

Test Statistic

A value calculated from a sample of data that is used to evaluate the validity of a hypothesis in statistical hypothesis testing.

α

Typically used to represent the significance level in hypothesis testing, which is the probability of rejecting the null hypothesis when it is actually true.

P-value

The probability of observing data at least as extreme as the observed data, assuming the null hypothesis is true.

Test Statistic

A numerical value calculated from a sample data during hypothesis testing, used to determine whether to reject the null hypothesis.