The West Division of Frede Corporation had average operating assets of $700,000 and net operating income of $120,800 in December. The minimum required rate of return for performance evaluation purposes is 16%.
-What was the West Division's minimum required return in December?
A)$112,000
B)$120,800
C)$131,328
D)$19,328

Question

Quizplus · Accepted Answer

The minimum required return is calculated by multiplying the average operating assets by the minimum required rate of return: $700,000 * 16% = $112,000.

The West Division of Frede Corporation Had Average Operating Assets