Use the Information Below to Answer the Following Question(s)

question 166

Multiple Choice

Use the information below to answer the following question(s) :
The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands) .

Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.
-What is the Tandem division's asset turnover?

• A) 2.0
• B) 4.2
• C) 8.3
• D) 13.3

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Definitions:

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss.

Expected Rate

The anticipated yield or return on an investment, loan, or other financial products over a specific period.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean.

Risk-Free Asset

An investment with a guaranteed return and no chance of default, often used as a benchmark for the risk level of other investments.