The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating IncomeInvested AssetsRetail Division$184,800 $840,000 Commercial Division142,500 570,000 Internet Division197,600 760,000  a.  Compute the return on investment for each division. (Round to the nearest whole percentage.)DivisionPercentRetail Division %Commercial Division %Internet Division %b.  Which division is the most profitable per dollar invested?

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Asked Nov 25, 2019
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The operating income and the amount of invested assets in each division of Conley Industries are as follows:

  Operating Income Invested Assets
Retail Division $184,800   $840,000  
Commercial Division 142,500   570,000  
Internet Division 197,600   760,000  

 

a.  Compute the return on investment for each division. (Round to the nearest whole percentage.)

Division Percent
Retail Division  %
Commercial Division  %
Internet Division  %

b.  Which division is the most profitable per dollar invested?
 

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Expert Answer

Step 1

Return on investment:

Return on investment is a ratio between net profit and cost of investment. A high return on investment means the investment’s gain compare favorably to its costs. As a performance measure, Return on Investment is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investment.

Step 2

a.   Following are the computation of return on investment for each divis...

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Operating Income Return on Investment= Invested Assets By putting the value in above formula will get: Operating Income (a) Division Invested Assets (b) Return on Investment a b Retail $184,800 $142,500 $197,600 $840,000 $570,000 $760,000 22% Commercial 25% Internet 26%

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