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Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 10%
Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 20%. Its effective tax rate is 30%.
| Sales | $7,000,000 |
| Operating income | 1,400,000 |
| Total assets | 1,000,000 |
| Current liabilities | 790,000 |
What is the division's Return on Investment (ROI)?
a. 700.00% b. 20.00% c. 140.00% d. 79.00%
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