Lewis Company Has Operating Income of $120,000

question 154

Multiple Choice

Lewis Company has operating income of $120,000. Its return on investment (ROI) is 40%, while its target rate of return is 7%. The total assets of Lewis Company may be closest to

• A)$8400.
• B)$1,714,286.
• C)$48,000.
• D)$300,000.

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Definitions:

Self-Storage Units

Facilities where individuals or businesses can rent space on a short-term basis to store personal possessions, inventory, or records securely.

Bakery Outlets

Retail stores that sell bakery products directly from manufacturers, often at discounted prices due to surplus or approaching expiration dates.

Fresh Baked Goods

Food items like bread, pastries, and cakes that are recently made and have not been preserved by any artificial means.

Cost of Equity Capital

The rate of return that a company must offer investors to incentivize them to hold its equity, reflecting the risk of the investment.