Answer the Following Question(s)using the Information Below

question 131

Multiple Choice

Answer the following question(s) using the information below:
Coldbrook Company has two sources of funds: long-term debt with a market and book value of $15 million issued at an interest rate of 10%, and equity capital that has a market value of $9 million (book value of $5 million) .Coldbrook Company has profit centres in the following locations with the following operating incomes, total assets, and current liabilities.The cost of equity capital is 15%, while the tax rate is 30%.
-For the period just ended, Trident Ltd.reported profit of $22.6 million and invested capital of $250 million.Assuming an imputed interest rate of 8%, which of the following choices correctly denotes Trident's return on investment (ROI) and residual income respectively?

• A)8.32%; $20.792 million
• B)9.04%; $20,792 million
• C)9.76%; $4.408 million
• D)9.04%; $2.6 million
• E)9.76%; $2.6 million

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Definitions:

Open Marriage

A marriage in which the partners agree that each may engage in sexual relationships with other people.

Singles World

The social scene or lifestyle of individuals who are not in a marriage or romantic relationship.

Casual Affairs

Relationships or encounters that are sexual in nature but not considered serious or committed.

Social Groups

Collections of individuals defined by shared interests or characteristics, forming a basic unit of social organization.