Given the following data: Average operating assets $ 432,000 Total liabilities $ 54,000 Sales $ 216,000 Contribution margin $ 110,160 Net operating income $ 64,800 Return on investment (ROI) is:
Given the following data: Average operating assets $ 432,000 Total liabilities $ 54,000 Sales $ 216,000 Contribution margin $ 110,160 Net operating income $ 64,800 Return on investment (ROI) is:
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...
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Question
Given the following data:
| Average operating assets | $ | 432,000 |
| Total liabilities | $ | 54,000 |
| Sales | $ | 216,000 |
| Contribution margin | $ | 110,160 |
| Net operating income | $ | 64,800 |
Expert Solution
Step 1
Return on investment is a financial ratio which evaluates the efficiency of a project or investment or compare multiple investments.
Formula:
Return on investment (ROI) = (Net operating income Average operating assets) x 100
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