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

question 144

Multiple Choice

Use the information below to answer the following question(s) :
The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands) .

Management's target rate of return is 10% and the weighted average cost of capital is 8%. Tandem's effective tax rate is 35%.
-What is the Tandem division's Return on Investment (ROI) ?

• A) 7.50%
• B) 12.00%
• C) 24.00%
• D) 200.00%

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Definitions:

Fine Imposed

A monetary penalty levied by an authority as punishment for a violation or infringement.

Demand Curve

Illustrates the willingness of consumers to buy a particular quantity of a good at various price levels, with a downward slope indicating that as price decreases, demand increases.

Plaster

A building material composed of water, lime, and sand, used for coating walls and ceilings or for creating architectural decorations.

Labor

The physical and mental effort used in the production of goods and services by workers.