The Consumer Products Division of Garafalo Corporation had average operating assets of $300,000 and net operating income of $46,900 in March. The minimum required rate of return for performance evaluation purposes is 16%.
-What was the Consumer Products Division's minimum required return in March?
A) $55,504
B) $48,000
C) $7,504
D) $46,900

Question

Quizplus · Accepted Answer

To calculate the minimum required return, we will use the formula: Minimum Required Return = Operating Assets x Minimum Required Rate of Return. 
So, Minimum Required Return = $300,000 x 0.16 = $48,000. Therefore, the correct answer is B.

The Consumer Products Division of Garafalo Corporation Had Average Operating