The New Products Division of Testar Company Has Developed a Potential

question 40

Multiple Choice

The New Products Division of Testar Company has developed a potential new product that would require $8,500,000 in operating assets and would be expected to provide $1,400,000 in operating income each year.Testar has set a target return on investment (ROI) of 16% for each of its divisions.Which of the following statements is accurate?

• A) The new product is acceptable because it will yield an ROI that is higher than the target ROI and will yield residual income of $40,000.
• B) The new product will yield residual income of $45,000.
• C) The new product will decrease the companywide ROI.
• D) The new product is unacceptable because it will yield an ROI that is lower than the target ROI.

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Definitions:

Mnemonic Devices

Tools or techniques that aid in the memorization or retrieval of information, often by making connections between new information and information already stored in memory.

Method Of Loci

A memorization method that requires the learner to visualize an ordered series of physical locations as mnemonic cues for a list of information.

Pegword Method

A mnemonic device that involves linking words with numbers to remember a list of items in order by associating them with pre-memorized peg words.

Dual-Coding Hypothesis

A cognitive theory that suggests information is stored in either or both verbal and visual systems, enhancing memory and learning.