Question

The following information pertains to Moore Company: Total assets $150,000 Total current liabilities 110,000 Total expenses 160,000 Total liabilities 115,000 Total revenues 180,000 If invested capital is defined as total assets, a project earning an ROI of 12% should be _____.

Answer 1

Rejected if the cost of the capital is greater than 12%

Step-by-step explanation:

Given information in the question

Total assets $150,000

Total current liabilities $110,000

Total expenses $160,000

Total liabilities $115,000

Total revenues $180,000

Return on investment = 12%

By considering the above information, we can concluded that if the project earning i.e ROI is 12% should be rejected if the cost of capital is more than 12% i.e given in the question