The Geelong Division of the Wasson Widget Co

question 62

Multiple Choice

The Geelong Division of the Wasson Widget Co. requires a 12% rate of return. During a recent year Shannon had a net profit of $400,000 and a residual income of $250,000. What was its ROI?

• A) 32%
• B) 15%
• C) 12%
• D) 26%

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Definitions:

Operating

Pertains to the day-to-day activities involved in managing a business, including production, sales, and administration.

Financing

The act of providing funds for business activities, making purchases, or investing, through various means like loans, credit, or equity.

Investing

The process of distributing funds, typically financial, in anticipation of earning revenue or gains.

Accounting Perspective

A viewpoint characterizing how accounting principles and practices are applied to record, summarize, and interpret financial information.