Assume Division 1 of the XYZ Company Had the Following

Multiple Choice

Assume division 1 of the XYZ Company had the following results last year (in thousands) . Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%.

-What is the division's return on investment?

A) 5%
B) 10%
C) 20%
D) 50%