Assume Division 1 of the XYZ Company Had the Following

question 112

Multiple Choice

Assume Division 1 of the XYZ Company had the following results last year.
$\begin{array}{|l|r|}\hline\text { Sales } & \$ 3,000,000 \\\hline \text { Operating income } & 500,000 \\\hline \text { Total as sets (average) } & 4,500,000 \\\hline \text { Current liabilities } & 300,000\\\hline\end{array}$
Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%.
-What is the division's return on investment?

• A) 5%
• B) 10%
• C) 20%
• D) 50%

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Definitions:

Normal Distribution

A bell-shaped distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Normal Distribution

This is a probability distribution characterized by symmetry around the mean, where occurrences are more common near the mean than far from it.

Symmetrical

A shape or distribution that is mirrored and balanced on both sides of a central point.

Standard Normal Distribution

A type of normal distribution where the mean is 0 and the standard deviation is 1.