The Consumer Products Division of Mickolick Corporation had average operating as
ID: 2472356 • Letter: T
Question
The Consumer Products Division of Mickolick Corporation had average operating assets of $490,000 and net operating income of $41,000 in August. The minimum required rate of return for performance evaluation purposes is 11%.
The Consumer Products Division of Mickolick Corporation had average operating assets of $490,000 and net operating income of $41,000 in August. The minimum required rate of return for performance evaluation purposes is 11%.
What was the Consumer Products Division's minimum required return in AugustExplanation / Answer
Minimum required rate of return = Net Income / Average operating assets
11% = x / 490,000
x = 490,000*0.11
x = 53,900
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