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The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results:                                          Alpha                Beta Sales                          $3,000,000              $2,500,000 Operating income          750,000                  550,000 Taxable income               650,000                 375,000  Investment                    6,000,000              5,000,000  The company's desired rate of return is 10%. Income is defined as operating income. Required: What are the respective return-on-investment ratios for the Alpha and Beta Divisions? a. 0.110 and 0.125 b. 0.125 and 0.110 c. 0.050 and 0.150 d. 0.108 and 0.075

The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results:                                          Alpha                Beta Sales                          $3,000,000              $2,500,000 Operating income          750,000                  550,000 Taxable income               650,000                 375,000  Investment                    6,000,000              5,000,000  The company's desired rate of return is 10%. Income is defined as operating income. Required: What are the respective return-on-investment ratios for the Alpha and Beta Divisions? a. 0.110 and 0.125 b. 0.125 and 0.110 c. 0.050 and 0.150 d. 0.108 and 0.075

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results:

                                         Alpha                Beta

Sales                          $3,000,000              $2,500,000

Operating income          750,000                  550,000

Taxable income               650,000                 375,000 

Investment                    6,000,000              5,000,000 

The company's desired rate of return is 10%. Income is defined as operating income.

Required: What are the respective return-on-investment ratios for the Alpha and Beta Divisions?

a.
0.110 and 0.125
b.
0.125 and 0.110
c.
0.050 and 0.150
d.
0.108 and 0.075
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