The following information is reported for the current year for a division:

Sales	$3,800,000
Interest expense	$250,000
Net income	$500,000
Total assets	$5,000,000
Noninterest-bearing current liabilities	$400,000
Cost of capital	8%
Required rate of return	14%
Tax rate	30%

How much is the division's NOPAT?

A.

$500,000

B.

$575,000

C.

$750,000

D.

$675,000

The following information about its two divisions has been provided by management:

Division A

Division B

NOPAT	$1,400,000	$3,000,000
Sales	$10,000,000	$12,500,000
Invested capital	$15,000,000	$17,500,000

As it relates to investment center evaluation, how much is the profit margin of Division B?

A.

17.14%

B.

10.0%

C.

24.00%

D.

54.29%

NOPAT does not hold the investment center manager responsible for

A.

interest expense and noninterest-bearing current liabilities.

B.

interest expense.

C.

assets invested in the division.

D.

noninterest-bearing current liabilities.

A company reported net operating profit after taxes totaling $115,000 in 2014. The cost of capital is 10.5 percent and the invested capital is $560,000. R&D incurred in 2014 was $100,000. The company's EVA policy is to amortize intangible assets over 4 years. The income tax rate is 30 percent. How much is the company's economic value added for 2014?

A.

$66,325

B.

$108,700

C.

$56,200

D.

$100,825

Consider the following information

December 31

2013

2014

Total assets	$40,000,000	$56,500,000
Noninterest-bearing current liabilities	800,000	1,750,000
Net income	2,600,000	3,400,000
Interest expense	300,000	400,000
Tax rate	30%	30%

How much is the return on investment for 2014?

A.

6.72%

B.

6.43%

C.

5.84%

D.

6.94%

Which of the following units of Target will most likely be a cost center?

	A.	The optical department
	B.	The corporate payroll department
	C.	The pharmacy department
	D.	A Walmart store in Dallas, Texas