Asked by Kevin Clayton on May 22, 2024
Verified
The division's return on investment (ROI) is closest to:
A) 135.5%
B) 6.1%
C) 32.1%
D) 2.4%
Return on Investment
A measure used to evaluate the efficiency of an investment, calculated as the return (profit) of an investment divided by the cost of the investment.
Division
A section or branch of a company that operates semi-autonomously, focusing on a particular product line, market segment, or geographical area.
- Familiarize yourself with the calculation and impact of Return on Investment (ROI).
Verified Answer
SS
samantha sloaneMay 26, 2024
Final Answer :
C
Explanation :
The formula for ROI is (Net profit / Investment) x 100. From the given data, the net profit of the division is $33,100 and the investment in the division is $103,000. Plugging these values into the formula gives us (33,100 / 103,000) x 100 = 32.1%. Therefore, the closest choice is C.
Explanation :
ROI = Net operating income ÷ Average operating assets
= $1,924,320 ÷ $6,000,000 = 32.072%
= $1,924,320 ÷ $6,000,000 = 32.072%
Learning Objectives
- Familiarize yourself with the calculation and impact of Return on Investment (ROI).