Answer the Following Questions Using the Information Below

question 88

Multiple Choice

Answer the following questions using the information below:
Judith Vending Company has invested $800,000 in a plant to make vending machines. The target operating income desired from the plant is $120,000 annually. The company plans annual sales of 1,200 vending machines at a selling price of $1,000 each.
-What is the target rate of return on investment for Judith Vending Company?

• A) 18.0%
• B) 15.0%
• C) 14.0%
• D) 66.7%

---

Definitions:

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Par Value

The face value of a bond or stock, representing the nominal or original value as fixed in the certificate or instrument.

Market Value

The current price at which an asset or service can be bought or sold.

Treasury Stock-Common

Shares of a company's own stock that it has reacquired from shareholders and are considered issued but not outstanding.