The Jenkins Division recorded operating data as follows for the past year:

-For the past year, the minimum required rate of return was:
A)7%
B)8%
C)16%
D)14%

Question

The Jenkins Division recorded operating data as follows for the past year:

-For the past year, the minimum required rate of return was:
A)7% 
B)8% 
C)16% 
D)14%

Quizplus · Accepted Answer

Since "minimum required rate of return" implies the risk associated with the investment, a higher percentage is more likely to be selected. Options C and D are both very high and may be unrealistic. Option A is also lower than what is typically required for an investment. Therefore, the best choice would be B, 8%, which is a reasonable minimum required rate of return.

The Jenkins Division Recorded Operating Data as Follows for the Past