Ringo Corporation had the following results last year (in thousands). Management's target rate of return is 15% and the weighted average cost of capital is 10%. Its effective tax rate is 35%
Sales $20,000,000
Operating income 4,000,000
Total assets 8,000,000
Current liabilities 4,820,000
What is the division's Return on Investment (ROI)?
A) 500.00%
B) 20.00%
C) 50.00%
D) 32.80%
C
Explanation: C) Operating income 4,000,000/Total assets 8,000,000 = 50%
Business
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