Reardon Enterprises Has Operating Income of $90,000

question 189

Multiple Choice

Reardon Enterprises has operating income of $90,000.Its return on investment (ROI) is 40%,while its target rate of return is 15%.The total assets of Reardon Enterprises may be closest to

• A)$36,000.
• B)$621,429.
• C)$225,000.
• D)$90,000.

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Definitions:

Compounded Quarterly

A method of calculating interest where the interest earned over a quarter is added to the principal sum, and the next quarter's interest is calculated over the new principal.

Effective Annual Rate

The interest rate on an investment or loan on an annual basis, taking compounding into account.

Compounded Continuously

A method of calculating interest where the frequency of compounding is infinitely small, effectively occurring every moment, leading to exponential growth.

Stated Rate

The interest rate declared on a financial instrument, such as a bond or loan, without adjusting for compounding or fees.