1. Hilton's 2001 segment reporting note showed that Hotel Ownership has revenue of $1,886 million, operating income of $474 million, and assets of $4,925 million. Managing and Franchising had revenues of $120 million, operating income of $113 million, and assets of $680 million. This indicates that:

a. Hotel Ownership has a higher operating return on sales than Managing & Franchising

b. Managing & Franchising probably should be sold since the return operating return on sales is extremely low

c. Hotel Ownership had an operating return on sales ratio below 2%, a possible red flag

d. Managing & Franchising s asset turnover ratio at 17.6% suggests inefficiency when compared to Hotel Ownership

2. Marriott uses the all-current method for foreign currency translation. The translation adjustment for 2001 was -$14 million (a net loss), and net income was $236 million. The translation adjustment was:

a. Reported as a loss under income from continuing operations

b. Reported as an extraordinary loss on the income statement

c. Reported directing to current liabilities at $14 million

d. Reported as a negative equity item as an other comprehensive income item

3. General Electric (GE) had a Prepaid Pension Asset of $12.4 billion, total assets of $495 billion, and net income of $13.7 billion, all for 2001. This means that:

a. GE's pension plan was underfunded by $12.4 billion

b. GE recorded a nonrecurring item on the income statement for $12.4 billion

c. GE had other comprehensive income of $12.4 billion

d. GE's pension plan was overfunded by $12.4 billion