The Genesis Division of REM Corporation had average operating assets of $643,000
ID: 2512731 • Letter: T
Question
The Genesis Division of REM Corporation had average operating assets of $643,000 and net operating income of $100,000 in December. The minimum required rate of return for performance evaluation purposes is 18%.
What was the division's minimum required return in December?
a.) $18,000
b.) $115,740
c.) $100,000
d.) $133,740
The Genesis Division of REM Corporation had average operating assets of $643,000 and net operating income of $100,000 in December. The minimum required rate of return for performance evaluation purposes is 18%.
Explanation / Answer
minimum required return=minimum required rate of return*average operating assets
which is equal to
=($643000*18%)
which is equal to
=$115740.