The Genesis Division of REM Corporation had average operating assets of $643,000

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.

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