Commercial Pilot Licence (CPAER) – Canada · Question
A Canadian company uses Return on Investment (ROI) to evaluate its divisional managers. Division A has an ROI of 15% and Division B has an ROI of 12%. The company's cost of capital is 10%. Which of the following is true?
Both divisions are creating value because their ROI (15% and 12% respectively) is greater than the company's cost of capital (10%). This means they are generati
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Question: A Canadian company uses Return on Investment (ROI) to evaluate its divisional managers. Division A has an ROI of 15% and Division B has an ROI of 12%. The company's cost of capital is 10%. Which of the following is true?
Answer options: ✅ Both divisions are creating value for the company.
- Only Division A is creating value for the company.
- Neither division is performing satisfactorily.
- ROI is not a valid measure for this comparison.
Correct answer: Both divisions are creating value for the company.
Explanation: Both divisions are creating value because their ROI (15% and 12% respectively) is greater than the company's cost of capital (10%). This means they are generating returns in excess of the costs of the capital they employ.
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Question explanations
- What is the minimum visibility required for a commercial VFR flight in Class D airspace at or below 3,000 feet
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- Scenario 1: A commercial pilot conducting an IFR flight in Canadian airspace must hold which of the following
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