Ask Question
15 January, 11:56

The Jazz Division of Heights Recording Corporation reported the following results last year: Sales $10,000,000 Operating Income $2,200,000 Total Assets $4,000,000 Current Liabilities $2,500,000 Management's target rate of return is 12% and the weighted average cost of capital is 9%. Its effective tax rate is 32%. Calculate the ROI for the Jazz Division. A. 22% B. 88% C. 12% D. 55% Did the Jazz Division earn or exceed the target rate of return? A. Yes B. No

+2
Answers (1)
  1. 15 January, 12:06
    0
    The ROI for the Jazz Division IS 55%. The right answer is D.

    A. Yes

    Explanation:

    In order to calculate the ROI for the Jazz Division we would have to use the following formula

    ROI = Operating income/Total assets

    According to the given dа ta:

    Operating income=$2,200,000

    Total assets = $4,000,000

    Therefore, ROI = $2,200,000/$4,000,000

    ROI = 55%

    The ROI for the Jazz Division is 55%

    A. Yes. The Jazz Division earn the target rate of return
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The Jazz Division of Heights Recording Corporation reported the following results last year: Sales $10,000,000 Operating Income $2,200,000 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers