Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

A company’s accounting period finishes on 31 December. By the close of Year 1, the company had equity funding of $850\,000$ and no long-term borrowings. At the start of Year 2, a $6\%$ debenture worth $150\,000$ was issued. The profit for Year 2 was $58\,000$ and dividends amounting to $20\,000$ were paid out. What was the return on capital employed for Year 2?

  • A$5.59\%$
  • B$6.33\%$
  • C$6.45\%$
  • D$7.55\%$

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