Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%.

-What is the division's return on investment?
A) 5%
B) 10%
C) 20%
D) 50%

Question

Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%.
 
-What is the division's return on investment?
A) 5% 
B) 10% 
C) 20% 
D) 50%

Quizplus · Accepted Answer

The Answer is B

Assume Division 1 of the XYZ Company Had the Following