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

question 151

Multiple Choice

Use the information below to answer the following question(s) .Berger Publishing has two divisions which operate autonomously.Their results for the past year were as follows:
The company's desired rate of return is 15%.
-What are the respective return on investment ratios for the Toronto and Vancouver divisions?

• A)0.04; 0.58
• B)0.31; 0.47
• C)0.38; 0.40
• D)0.77; 1.25
• E)0.38; 0.45

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Definitions:

Net Income

The final income of a firm following the deduction of all expenditures, taxes, and interest from the gross revenue.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, revealing profit or loss.

Retained Earnings

Retained earnings are the portion of a company’s profits that is kept or retained rather than being paid out as dividends to shareholders or reinvested into the business.