The New Products Division,of Testar Company,had Operating Income of $8,000,000

question 28

Multiple Choice

The New Products Division,of Testar Company,had operating income of $8,000,000 and operating assets of $44,800,000 during the current year.The New Products Division 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.Assuming that the new product is put into production,calculate the division's ROI.

• A) 17.6%
• B) 17.9%
• C) 16.5%
• D) The answer cannot be determined using the information provided.

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Definitions:

Fertilizing Eggs

The process in which male gametes (sperm) fuse with female gametes (eggs) to initiate the development of a new organism.

Genetic Variation

Genetic variation is the diversity in gene frequencies, resulting from mutations, genetic recombination, and other sources, providing the material for evolution and adaptation in populations.

Asexual Reproduction

A mode of reproduction that does not involve the fusion of gametes, leading to offspring genetically identical to the parent.

Genetically Identical Offspring

Offspring that share the same genetic material, typically as a result of asexual reproduction.