Assume the Cell Phone Division of the First Electronics Corporation

question 63

Multiple Choice

Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands) .Management's target rate of return is 10% and the weighted average cost of capital is 7%.Its effective tax rate is 30%. $$\begin{array} { | l | r | } \hline \text { Sales } & \$ 6,000,000 \\\hline \text { Operating income } & 900,000 \\\hline \text { Total assets } & 3,000,000 \\\hline \text { Current liabilities } & 750,000 \\\hline\end{array}$$
- What is the division's sales margin?

• A)200.00%
• B)15.00%
• C)25.00%
• D)30.00%

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Definitions:

Irrational

Referring to thoughts, actions, or behaviors not based on logical reasoning or rationality.

Self-centered

Describes an individual who is overly focused on their own feelings, needs, or interests, often at the expense of others.

Self-doubt

The feeling of uncertainty about one's abilities, decisions, or worth.

Motivated

Having a desire, willingness, or drive to take action or achieve something, often stemming from personal goals or external incentives.