Multiple Choice
The asset section of the January 1, 20X9, balance sheet of Junction Company includes a machine which was acquired on January 1, 20X5.The machine's original cost was $500,000, and the estimated life was determined to be 10 years.The estimated economic profit was zero, and the straight-line method of depreciation was chosen.If operating income before depreciation is $95,000, the rate of return on gross book value for 20X9 is _____.
A) 9%
B) 14.4%
C) 18%
D) 35%
Correct Answer:
Verified
Correct Answer:
Verified
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