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The following information is reported for the current year for North Atlantic Division of XT Enterprises: Sales $3,800,000 Interest expense $250,000 Net income $500,000 Total
The following information is reported for the current year for North Atlantic Division of XT Enterprises:
Sales | $3,800,000 | |
Interest expense | $250,000 | |
Net income | $500,000 | |
Total assets | $5,000,000 | |
Noninterest-bearing current liabilities | $400,000 | |
Cost of capital | 8% | |
Required rate of return | 14% | |
Tax rate | 30% |
How much is the divisions invested capital?
| $5,400,000 |
| $5,000,000 |
| $4,600,000 |
| $5,500,000 |
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