Terra Company Has Two Divisions, the Retail Division and the Wholesale

question 123

Multiple Choice

Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: $\begin{array}{cc} & \text { Retall D1vislon }&\text { Wholesale} \\&&\text { Division}\\\text { Operating income } & \$ 2,500,000 &\$6,000,000\\\text { Operating assets } & \$ 16,000,000&\$36,000,000\end{array}$ Terra Company has set a target return on investment (ROI) of 15% for both divisions. Based on ROI, which division appears to have performed better?

• A) Retail division.
• B) Wholesale division.
• C) Both divisions have the same results.
• D) The answer cannot be determined using the information provided.

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Definitions:

Confidence Interval

Several values, drawn from statistics of samples, which aim to contain the value of an uncharted population parameter.

Gas Price

The cost per unit volume of gasoline, often varying by region, influenced by taxes, supply, demand, and other factors.

Unleaded Gasoline

A type of gasoline without the addition of lead compounds, used to prevent harm to the environment and public health.

Confidence Interval

An array of values, pulled from sampling data, envisioned to enclose the value of a mysterious population parameter.