Answer the Following Questions Using the Information Below:
Carriage Incorporated

question 105

Multiple Choice

Answer the following questions using the information below:
Carriage Incorporated manufactures horse carriages. The company has two divisions, Wheels and Assembly. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 2015:
$$\begin{array} { | l | r | r | r | r | } \hline & { \text { ASSETS } } && { \text { INCOME } } \\\hline & \text { Book value } & \text { Current value } & \text { Book value } & \text { Current value } \\\hline \text { Wheels } & \$ 485,000 & \$ 550,000 & \$ 120,000 & \$ 140,000 \\\hline \text { Assembly } & \$ 750,000 & \$ 1,200,000 & \$ 160,000 & \$ 172,500 \\\hline\end{array}$$ The company is currently using a 12% required rate of return.
-What are Wheels's and Assembly's return on investment based on book values,respectively?

• A) 0.21; 0.25
• B) 0.25; 0.21
• C) 0.14; 0.25
• D) 0.25; 0.14

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Definitions:

Unfair Treatment

Acts of injustice or discrimination in various contexts, including workplaces, based on biases or inequalities.

Nonunionized Employees

Workers who are not members of a labor union and thus rely on individual agreements with their employers regarding work conditions, wages, and benefits.

Collective Agreement

A written contract negotiated between an employer and a labor union representing the workforce, outlining wages, hours, and conditions of employment.

Length of Service

The duration of time an employee has worked for a particular employer, usually considered in terms of years or other significant time units.