The Soccer Shoppe Has a 7 Percent Return on Assets

question 72

Multiple Choice

The Soccer Shoppe has a 7 percent return on assets and a 25 percent payout ratio. What is its internal growth rate?

• A)3.72 percent
• B)4.08 percent
• C)4.49 percent
• D)5.23 percent
• E)5.54 percent

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Definitions:

Revenue Variance

The variance between projected revenue and the actual income received.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Net Operating Income

The profit generated from a company's everyday business operations, calculated by subtracting operating expenses from the gross income.