The Consumer Products Division of Goich Corporation had average operating assets of $800,000 and net operating income of $81,300 in May. The minimum required rate of return for performance evaluation purposes is 10%.What was the Consumer Products Division's minimum required return in May?
A. $81,300
B. $8,130
C. $80,000
D. $88,130
Answer: C
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Using the future value table, a student found that the future value amount of $1 for 5 years at an annual interest rate of 10% is 1.611 . The student also observed that the future value of $1 for 5 years at 10% compounded semiannually is 1.629 . This means that
a. the more often the compounding, the higher the future value. b. the student was looking in the wrong column; the second amount should be 1.611/2. c. there was an error in the table. d. when interest is compounded semiannually, more money must be deposited to have a desired ending balance.
Arthur Walker, an accountant, prepared financial statements for Globalus Ltd., a public company whose shares traded on the stock exchange
A shareholder of Antimony Ltd, a company which was considering taking over Globalus, was reading the document on the subway and forgot it. Frank Nelson picked the statements up and bought shares in the company based on what he had read. Walker had made a careless mistake and Frank's investment turned out to be worthless. Which of the following is TRUE? A) Walker owed a duty of care to Antimony respecting investment decisions. B) Walker owed a duty of care to Globalus. C) Walker owed a duty of care to Frank. D) Both A and C E) Both B and C
The power of negative purchase experiences is greater than that of positive experiences.
Answer the following statement true (T) or false (F)
On January 2, 20X2, Piranha Company acquired 70 percent of Salmon Corporation's common stock for $420,000 cash. At the acquisition date, the book values and fair values of Salmon' assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 30 percent of the total book value of Salmon. The stockholders' equity accounts of the two companies at the acquisition date are as follows: Piranha Salmon Common Stock ($10 par value)$600,000 $350,000 Additional Paid-In Capital 450,000 50,000 Retained Earnings 250,000 200,000 Total Stockholders' Equity$1,300,000 $600,000 Noncontrolling interest was assigned income of $15,000 in Piranha's consolidated income statement for 20X2.Based on the preceding information, what will be the amount of net
income reported by Salmon Corporation in 20X2? A. $45,000 B. $105,000 C. $50,000 D. $75,000