Financial Statements for Orange Company Appear Below Total Dividends During Year 2 Were

question 193

Multiple Choice

Financial statements for Orange Company appear below:

$\begin{array}{|l|r|}\hline&\text { Orange Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline \text { Sales (All on Account) } & \$ 2830 \\\hline \text { Costs of Goods Sold } & \$ 1980 \\\hline \text { Gross Margin } & \$ 850 \\\hline \text { Operating Expenses } & \$ 340 \\\hline \text { Net Operating Income } & \$ 510 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 480 \\\hline \text { Income Taxes (30\%) } & \$ 144 \\\hline \text { Net Income } & \$ 336\\\hline\end{array}$


Total dividends during Year 2 were $\$ 156,000$ , of which $\$ 18,000$ were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $\$ 100$ .
-Orange Company's return on total assets for Year 2 was closest to which of the following?

• A) 14.5%.
• B) 15.5%.
• C) 15.9%.
• D) 16.5%.

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Definitions:

Free Trade Agreement

A pact between two or more nations to reduce barriers to imports and exports among them, enhancing economic integration and trade.

Global Uniformity

The tendency towards minimization of cultural and operational differences across various regions, aiming for a consistent global approach or standard.

Cultural Issues

Challenges that arise from differences in language, norms, beliefs, and practices among people from various cultures.

Maturity Stage

A phase in the lifecycle of a product during which growth slows, indicating a saturation of the market segment it occupies.