What the most suitable rate of roi for division a

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Problem 1: Monstera Company's Adansoni Division has the following accounts last year:Sales ...P480,000 ; Cost of goods sold...P222,000; Selling and administrative expense ...P210,000; Income tax rate 30% ; Total capital employed ... P300,000. Monstera Company's actual cost of capital is 10 percent. The value added returns amounts to P3,650.

a. None of the above.

b. True

c. False

Problem 2: Division A of Coleus Group had investments at the year end of P56,000,000which includes a new equipment costing P3 million acquired two weeks before the end of the year. This equipment was paid for by the Head Office Finance Unit of Coleus, and is recorded in the accounts as an inter-company loan.The profit of division A for the year was P7 million before deducting head office allocated cost of P800,000. The most suitable rate of ROI for Division A for the year is ?

a. 11.07%

b. 13.2%

c. 11.7%

d. 12.5%

Reference no: EM132743717

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