Alpha Division Had the Following Information Suppose the Asset Base Is Decreased by $200,000,with No Other

question 72

Multiple Choice

Alpha Division had the following information: $$\begin{array} { l r } \text { Asset base in Alpha Division } & \$ 800,000 \\\text { Net income in Alpha Division } & \$ 100,000 \\\text { Cost of capital } & 12 \% \\\text { Target ROI } & 15 \% \\\text { Margin for Alpha Division } & 20 \%\end{array}$$ Suppose the asset base is decreased by $200,000,with no other changes.What would be the return on investment of Alpha Division?

• A) 16.7%
• B) 62.5%
• C) 100.0%
• D) 600.0%

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Definitions:

Kohlberg

Refers to Lawrence Kohlberg, a psychologist best known for his theory of moral development, which outlines the stages of moral reasoning.

Systematic

Methodically organized and carried out according to a plan or structured framework.

Chemicals

Substances with a distinct molecular composition that are used or produced in a chemical process.

Inhelder

Swiss developmental psychologist best known for her work on the cognitive development of children, often in collaboration with Jean Piaget.