The West Division of Fitzmaurice Corporation Had Average Operating Assets

question 60

Multiple Choice

The West Division of Fitzmaurice Corporation had average operating assets of $450,000 and net operating income of $87,300 in November. The minimum required rate of return for performance evaluation purposes is 18%.
-What was the West Division's minimum required return in November?

• A) $87,300
• B) $15,714
• C) $96,714
• D) $81,000

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Definitions:

Nominal Exchange Rate

The nominal exchange rate is the rate at which one country's currency can be exchanged for another country's currency without adjustment for inflation.

Price Level

A measure of the average prices of goods and services in an economy over a period of time.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Nominal Exchange Rate

The price of one currency in terms of another, not adjusted for inflation differences between the countries.