Homework Answers
Answer C 3.2 percentage
Explanation is as follows
Return on Investment = Operating profit ( before tax)/Assets Invested
=$80000/$25000
=3.2 percentage
For specific scenarios sometimes banks and other lending institution also ask for post tax ROI, then operating Income post tax should be considered
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31) Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same? A) A reduction in expenses. B) An increase in net operating income. C) An increase in operating assets. D) An increase in sales. 32) Tennill Inc. has a $1,400,000 investment opportunity with the following characteristics: Sales $ 4,480,000 40 % of sales Contribution margin ratio Fixed expenses S 1,657,600 The ROI for this year's investment opportunity is closest...
18 Rooney Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division: Skipped BOWMAN DIVISION Income Statement For the Year Ended December 31, 2018 Sales revenue $106,580 Cost of goods sold 59,975 Gross margin 46,605 Operating expenses Selling expenses (2,710) Depreciation expense (4,175) Operating income 39,720 Nonoperating item Loss of sale of land (3,500) Net income $ 36,220 BOWMAN DIVISION Balance Sheet As of December 31, 2018 Assets Cash Accounts receivable Merchandise inventory...
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