The Labrador Falls Company has three divisions: A Division,B Division,and C Division.$\begin{array}{|l|r|r|r|}
\hline & \text { A } & \text { B } & \text { c } \
\text { Sales }& \$ 320,000 & \$ 540,000 & ?\
\hline \text { Net operating income } & 60,000 & ? & \$ 24,000 \
\hline \text { Residual income }& ? & 36,000 & 14,400 \
\hline \text { Average Division } \
\text { Assets } & 250,000 & 320,000 & 80,000 \
\hline \text { Cost of Capital } & 12 \% & 16 \% & \
\hline \text { Profit Margin } & 20 \% & 5 \% & \
\text { Asset Turnover } & ? & 4.0 & \
\hline \text { Return on irwestment } & 15 \% & & \
\hline
\end{array}$
What was C Division's cost of capital last year?
A) 8%.
B) 12%.
C) 18%.
D) 20%.

Question

The Labrador Falls Company has three divisions: A Division,B Division,and C Division.$\begin{array}{|l|r|r|r|}
\hline  & \text { A } & \text { B } & \text { c } \
\text { Sales }& \$ 320,000 & \$ 540,000 & ?\
\hline \text { Net operating income }  & 60,000 & ? & \$ 24,000   \
\hline \text { Residual income }& ? & 36,000 & 14,400  \
\hline \text { Average Division }  \
 \text { Assets } & 250,000 & 320,000 & 80,000 \
\hline \text { Cost of Capital } & 12 \% & 16 \% & \
\hline \text { Profit Margin } & 20 \% & 5 \% & \
\text { Asset Turnover } & ? & 4.0 & \
\hline \text { Return on irwestment } & 15 \% & & \
\hline
\end{array}$
What was C Division's cost of capital last year? 
A) 8%.
B) 12%.
C) 18%.
D) 20%.

Quizplus · Accepted Answer

The cost of capital for each division is not given in the question. Therefore, we cannot determine the cost of capital of C division based on the information provided.

The Labrador Falls Company Has Three Divisions: a Division,B Division,and