AICPA Exam CPA-Business Topic 2 Question 92 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 92
Topic #: 2

[All CPA-Business Questions]

The following information pertains to Quest Co.'s Gold Division for 1993:

Quest's return on investment was:

A10.00 percent.

B13.33 percent.

C27.50 percent.

D30.00 percent.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. Return on investment equals net income divided by average invested capital:

Choices 'a', 'b', and 'd' are incorrect, per the above calculation.

by Georgeanna at Jul 11, 2024, 09:35 PM

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Lauran

4 months ago

I believe the correct answer is D) 30.00 percent, based on the information provided.

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Zita

4 months ago

This is easy, guys. The answer is clearly D) 30.00 percent. Can't you see the dollar signs in my eyes?

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Colette

4 months ago

Wait, is this a trick question? I bet the answer is A) 10.00 percent, just to mess with us.

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Lorean

4 months ago

Hmm, this is a tough one. I'm torn between B) and C). But I'll go with C) 27.50 percent, since that's the profit margin shown in the image.

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Nathalie

3 months ago

I'm going with D) 30.00 percent.

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Corazon

3 months ago

I'm leaning towards C) 27.50 percent.

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Sina

3 months ago

I agree with you, I also think it's B) 13.33 percent.

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Nan

3 months ago

I think it's B) 13.33 percent.

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Corinne

4 months ago

I'm going with D) 30.00 percent. The profit margin of 27.5% and total assets of 1,100 seem to indicate a pretty high return on investment.

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Delbert

2 months ago

I'm not sure, but I think A) 10.00 percent might be too low considering the profit margin and total assets.

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Ailene

3 months ago

I agree with you, C) 27.50 percent seems like a reasonable choice based on the information given.

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Cruz

3 months ago

I think it might be C) 27.50 percent. The profit margin is high, but the total assets are also high.

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Romana

3 months ago

I'm still leaning towards D) 30.00 percent. The profit margin is high and the total assets are not too low, so it could be a possibility.

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Lisbeth

3 months ago

I agree with you, C) 27.50 percent does seem like a good choice based on the information provided.

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Clarinda

4 months ago

I think it might be C) 27.50 percent. The profit margin is high and the total assets are not too high, so it seems like a reasonable return on investment.

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Ahmad

4 months ago

I'm not sure, but I think it might be C) 27.50 percent.

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Herman

4 months ago

I agree with Terrilyn, the return on investment seems to be around 13.33 percent.

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Amber

4 months ago

I think the answer is B) 13.33 percent. The image shows the profit margin and total assets, and I calculated the return on investment based on those numbers.

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