Assume the Air Conditioning division of the General Appliance 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%.

What is the division's capital turnover?
A)5.00
B)4.00
C)1.25
D)3.05

Question

Assume the Air Conditioning division of the General Appliance 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%.

What is the division's capital turnover?

What is the division's capital turnover?
A)5.00 
B)4.00 
C)1.25 
D)3.05

Quizplus · Accepted Answer

B)Sales $10,000,000/Total assets 2,500,000 = 4.00

Assume the Air Conditioning Division of the General Appliance Corporation