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

question 61

Multiple Choice

Use the information below to answer the following question(s) .Thacker Company has two regional offices.The information for each is as follows:

-An automotive dealership, with a book value of $3,000,000, and total assets of $5,000,000, has a long history of earning 18%.Last year, the company earned $900,000.The owner is considering acquiring another dealership in a nearby town.If the expansion increases income by 50%, what is the maximum amount of investment the owner can make in the new dealership in order to maintain his desired 18% return?

• A)$1,350,000
• B)$9,000,000
• C)$5,000,000
• D)$3,000,000
• E)$2,500,000

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Definitions:

High-Income Families

Households with an income significantly above the average, often associated with greater purchasing power and wealth accumulation.

College Degree

A certification awarded by colleges or universities upon successful completion of a course of study.

Full Time

Employment status characterized by working the number of hours defined as standard by an employer, typically around 40 hours per week.

High-Income Families

Households with earnings significantly above the average income level for a given region or country.