Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were $500,000. If sales next year remain the same as last year andexpenses and average operating assets are reduced by 5%, what will be the return oninvestment next year?a. 12.2%b. 18.2%c. 20.2%d. 25.2%

Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were $500,000. If sales next year remain the same as last year andexpenses and average operating assets are reduced by 5%, what will be the return oninvestment next year?a. 12.2%b. 18.2%c. 20.2%d. 25.2%

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

Last year sales were $300,000, net operating income was $75,000, and average
operating assets were $500,000. If sales next year remain the same as last year and
expenses and average operating assets are reduced by 5%, what will be the return on
investment next year?
a. 12.2%
b. 18.2%
c. 20.2%
d. 25.2%

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