Robichau Incorporated Reported the Following Results from Last Year's Operations

question 287

Multiple Choice

Robichau Incorporated reported the following results from last year's operations: At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:
The company's minimum required rate of return is 20%.Last year's return on investment (ROI) was closest to:

• A) 47.6%
• B) 18.9%
• C) 9.0%
• D) 45.7%

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Definitions:

Warranty Expense

Costs anticipated by a company for the repair or replacement of defective products during the warranty period, treated as a liability until used.

Estimated Cost

A projection or forecast of the total costs associated with completing a project, manufacturing a product, or providing a service.

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare in the United States.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within the normal operating cycle of a business, typically one year.