Use the following information to answer Question. The Furniture Division of Waverly Company reports the...
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Accounting
Use the following information to answer Question. The Furniture Division of Waverly Company reports the following results for 2012:
Use the following information to answer Question. The Furniture Division of Waverly Company reports the following results for 2012:
Revenues $400,000
Operating Exp $360,000
Operating Income $40,000
Operating assets $500,000
Waverly Company has set a target return on investment (ROI) of 12% for the Furniture Division. Assume that the division believes its revenues and operating expenses will continue to be $400,000 and $360,000, respectively. To what level would the Furniture Division have to reduce its operating assets to achieve the target ROI?
| A. | $375,000. |
| B. | $433,333. |
| C. | $333,333. |
| D. | $176,000. |
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