GHI IncHas Three Subsidiaries,Computers,Magazines and Cable TV

question 85

Essay

GHI Inc.has three subsidiaries,Computers,Magazines and Cable TV.Sales,net income and asset data for the most recent year is shown below by subsidiary: If the five million dollar investment in the Cable TV division is sold and redeployed in the computer subsidiary at the same rate of return on assets currently achieved in the computer division,What will be the new return on assets for the entire corporation?

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Definitions:

Inventory Valuation

The method used to calculate the cost associated with an inventory at the end of a financial period, affecting cost of goods sold and gross profit.

Gross Profit

The difference between sales and the cost of goods sold, indicating the basic profitability of a company's core business activities.

Ending Inventory

The value of goods available for sale at the end of the accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Ethics Violation

An action that goes against moral principles or professional standards, often resulting in disciplinary action.