The Pasta Division of Whole Grain Corporation Had Sales of $9,000,000

question 126

Multiple Choice

The Pasta Division of Whole Grain Corporation had sales of $9,000,000 and operating income of $1,620,000 last year. The total assets of the Pasta Division were $2,500,000, while current liabilities were $350,000. Whole Grain Corporation's target rate of return is 18%, while its weighted average cost of capital is 10%. The effective tax rate for the company is 45%. What is the Pasta Division's Return on Investment (ROI) ?

• A)18.00%
• B)3)89%
• C)64.80%
• D)360.00%

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