Recreation Equipment Company Has Several Divisions Which Are Investment Centers

question 19

Multiple Choice

Recreation Equipment Company has several divisions which are investment centers. Data for the Boat Division and the Trailer Division are shown here: $$\begin{array} { | l | c | c | } \hline & \text { Boat Division } & \text { Trailer Division } \\\hline \text { Operating income } & \$ 90,000 & \$ 36,000 \\\hline \text { Total assets at Jan 1 } & \$ 670,000 & \$ 230,000 \\\hline \text { Total assets at Dec } 31 & \$ 710,000 & \$ 220,000 \\\hline\end{array}$$ Which of the following statements would be the most meaningful interpretation of this data?

• A) Performance of Boat Division is better than that of Trailer Division because Boat Division has higher assets.
• B) Trailer Division uses its assets more efficiently than Boat Division because it has higher ROI.
• C) Boat Division shows more efficient use of assets than Trailer Division because it has higher operating income.
• D) Boat Division is more financially successful than Trailer Division because it shows an increase in assets

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Definitions:

Mindfulness Meditation

A mental practice that involves focusing one's mind on the present moment, acknowledging and accepting feelings, thoughts, and bodily sensations, used as a therapeutic technique.

Low Conscientiousness

A personality trait associated with a tendency towards disorganization, carelessness, and a lack of responsibility.

Impulsivity

The tendency to take risks, not plan, and be high in sensation-seeking, roughly equivalent to low conscientiousness.

Social Inhibition

The tendency to perform tasks more poorly or act less freely in the presence of others.