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3 years ago

Mycrux Company had the following information:

Business

1 answer:

Olegator [25]3 years ago

5 0

Answer:

10.70%

Explanation:

Data provided in the question:

Asset base in Mycrux Company = $987,500

Net income in Mycrux Company = $105,700

Weighted average cost of capital = 12%

Target return on investment (ROI) = 15%

Margin for Mycrux Company = 20%

Now,

Return on investment of Mycrux Company = $\frac{\textup{Net income in Mycrux Company}}{\textup{Asset base in Mycrux Company}}\times100\%$

Return on investment of Mycrux Company = $\frac{\textup{105,700}}{\textup{987,500}}\times100\%$

Return on investment of Mycrux Company = 0.1070 × 100%

= 10.70%

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