Contrast Crystal Company Has Experienced Some Questionable Changes in Both

question 30

Multiple Choice

Contrast Crystal Company has experienced some questionable changes in both its operating income and total assets.The managerial accountant reported that operating income has decreased by 6% from $400,000 to $376,000 and its total assets have decreased by 6% from $2,025,000 to $1,900,000 in 2012.
Required
Compute the original ROI and the final ROI.

• A)35%;14%
• B)20%;20%
• C)20%;16%
• D)25%;28%
• E)13%;18%

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Definitions:

Marketable Securities

Financial instruments that can be easily bought or sold on public exchanges or markets with high liquidity and short maturity periods.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Bottom Line

In finance, it refers to the net income or profit of a business after all expenses have been deducted from revenues. In general use, it means the final outcome or conclusion.

Net Income

The total profit of a company after all expenses and taxes have been deducted from its total revenue.