Bellingham Division Has a Required Rate of Return by Corporate

question 10

Multiple Choice

Bellingham Division has a required rate of return by corporate headquarters of 20%. The weighted average cost of capital is 12%. You are given the following information for Bellingham's operations for a two-year period: 2005 2004
Current assets $ 50,000 $ 60,000
Long-term assets 200,000 204,000
Accumulated amortization 60,000 44,000
Current liabilities 40,000 20,000
Long-term debt 100,000 140,000
Operating income for the year 19,000 21,000
Tax rate 40% 40%
The after-tax income for 2005 was:

• A)$47,500
• B)$11,400
• C)$7,600
• D)$31,667

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Definitions:

Short-term Storage

The part of the memory system where information is temporarily held before it is either discarded or transferred to long-term memory.

Limited Capacity

Refers to the finite amount of information or resources that a system or individual can handle at any given time.

Elaborative Rehearsal

A memory technique that involves thinking about the meaning of the term to be remembered, instead of merely repeating the term to oneself.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it within working memory or to encode it for long-term memory.