Based on the Business Segments Determined to Be Reportable Segments

question 12

Multiple Choice

Based on the business segments determined to be reportable segments for reporting to the board of directors each month,the following data have been derived from the notes attached to the subsidiary financial statements (amounts in thousands) : $\begin{array}{lrrrr}\text { segment }&\text { Other }&\text { Sales }&\text { Result }&\text { Assets }\\&\text { Revenue }&\text { Revenue }\\\text { Piebalds } & \$ 30000 & \$ 5000 & \$ 2000 & \$ 30000 \\\text { Skewbalds } & 10000 & 15000 & 4000 & 10000 \\\text { Pintos } & 20000 & 5000 & (500) & 15000\\\text { Crillos } & 15000 & 5000 & 3000 & 7000 \\\text { Other } & 5000 & - & 1000 & 10000\\\text { Total }&\$80,000&\$30,000&\$9,500&\$72,000\end{array}$
- On revenue and asset criteria only,the reportable business segments are:

• A) Piebalds, Pintos and Crillos.
• B) Piebalds, Skewbalds, Pintos and Crillos.
• C) Piebalds, Skewbalds, Pintos, Crillos and Others.
• D) none of the above.

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Definitions:

Required Return

The minimum expected return an investor demands for investing in a particular asset, factoring in its risk.

Discount Rate

The discount rate applied in the calculation of the present value of future cash flows in a DCF analysis.

Constant Growth Rate

An assumption in certain financial models that estimates an investment's dividends or cash flows will grow at a steady, unending rate.

Constant Growth Rate

A steady rate at which a variable, such as company earnings or dividends, increases over a specific period.