Canal Tower Is a Division of Sounder Products

Multiple Choice

Canal Tower is a division of Sounder Products.For the most recent year, Canal Tower had net income of $16,000,000.Included in income was interest expense of $1,200,000.The operation's tax rate is 40 percent.Total assets of Canal Tower are $225,000,000, current liabilities are $40,000,000, of which $35,000,000 are noninterest-bearing.How much is return on investment for Canal Tower?

A) 8.0%
B) 8.8%
C) 9.1%
D) 7.4%