Barrera Corporation Provides the Following Financial Information Calculate the Target Rate of Return

question 154

Multiple Choice

Barrera Corporation provides the following financial information: $$\begin{array} { | l | r | } \hline \text { Minimum acceptable operating income } & \$ 556,600 \\\hline \text { Average total assets } & \$ 2,000,000 \\\hline \text { Operating income } & \$ 708,000 \\\hline \text { Return on investment } & 35.40 \% \\\hline \text { Net sales } & \$ 900,000 \\\hline\end{array}$$ Calculate the target rate of return.(Round your answer to two decimal places.)

• A)27.83%
• B)78.67%
• C)35.40%
• D)61.84%

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Definitions:

Transactions Costs

Expenses incurred when buying or selling securities, which can include brokerage fees, commissions, and other charges.

Leverage

Utilizing borrowed funds to amplify the possible returns on an investment.

Portfolio's Beta

A measure of the overall volatility or risk of an investment portfolio in comparison to the market as a whole.

S&P500 Value

A measurement of the stock performance of 500 large companies listed on stock exchanges in the United States.