Figure 19-2
the Following Results for the Year Pertain to the Northern

question 41

Multiple Choice

Figure 19-2
The following results for the year pertain to the Northern Division of Garvey Ltd.: $\begin{array}{lr}\text { Sales } & £ 400,000 \\\text { Taxes } & 60,000 \\\text { Operating income after taxes } & 160,000\end{array}$
-Refer to Figure 19-2. If Northern's average operating assets are £1,200,000 and their minimum required rate of return is 12 per cent, what is the Northern Division's return on investment?

• A)33.3%
• B)18.3%
• C)13.3%
• D)12.0%

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Definitions:

Negligent Misstatement

A false statement made carelessly rather than with the intent to deceive, leading to someone's loss.

Economic Loss

Financial loss experienced as a result of another’s actions or failure to act, which can include lost profits, repair costs, and decreased value of property.

Defamation

The act of communicating false statements about a person that injure the reputation of that person.

Business Interruption Insurance

An insurance that covers the loss of income a business suffers after a disaster related to closing its premises or the rebuilding process.