Holo Company reported the following financial numbers for one of its divisions for the year; average total assets of $6,200,000; sales of $6,575,000; cost of goods sold of $3,625,000; and operating expenses of $1,307,000. Compute the division's return on investment:
rev: 12_09_2017_QC_CS-112007
Multiple Choice
24.99%.
19.9%
26.5%.
19.6%.
23.9%.
Answer : C = 26.50 %
>> Net Operating Income = $ 6,575,000 - $ 3,625,000 - $ 1,307,000 = $ 1,643,000.
>> Return on Investment = ( Net Operating Income * 100 ) / Average Total Assets
>> Return on Investment = ( $ 1,643,000 * 100 ) / 6,200,000
>> Return on Investment = 26.50 %
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