XYZ INC Has Several Divisions and the One Managed by Dr

question 44

Multiple Choice

XYZ INC has several divisions and the one managed by Dr. Donaldson has asset base of $4 million and earnings after taxes is $2 million. A new project would earn $2 million per year on an investment of $5 million. As a result, ROA of the division changed from:

• A) 50% to 44%.
• B) 55% to 40%.
• C) 44% to 50%.
• D) 50% to 70%.

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Definitions:

Microeconomics

The branch of economics that focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders.

Macroeconomics

The branch of economics that studies economic phenomena at a national, regional, or global level, including issues like inflation, unemployment, economic growth, and monetary and fiscal policy.

Unemployment Rate

The share of the workforce that's currently not employed but is actively looking for jobs.

Nominal NNP

The Gross National Product measured at current market prices, without adjusting for inflation.