Asked by Amber Lloyd on May 18, 2024
Verified
Tom's Tool Factory is an investment center and is responsible for all of its net income and the use of its assets. This year, the invested assets totaled $475,000, and net income was $275,000. What is the return on investment?
A) 57.9%
B) 172.3%
C) 5.0%
D) 115.0%
Return On Investment
A measure used to evaluate the profitability of an investment, calculated as a ratio of net profit to the initial cost of the investment.
Invested Assets
Assets that are purchased or acquired for the purpose of generating income or appreciating in value, such as stocks, bonds, and real estate.
Net Income
The total earnings of a company after subtracting all expenses, taxes, and losses from total revenue, indicating the firm's profitability over a specific period.
- Acquire knowledge about the concept of return on investment and the procedure for calculating it.
- Recognize the roles and benchmarks for assessing investment centers.
Verified Answer
Learning Objectives
- Acquire knowledge about the concept of return on investment and the procedure for calculating it.
- Recognize the roles and benchmarks for assessing investment centers.
Related questions
The Profit Margin for the Central Division of a Company ...
The Balanced Scorecard Measures Four Areas of Financial and Nonfinancial ...
Managers of What Type of Decentralized Units Have Authority and ...
What Additional Information Is Needed to Calculate the Return on ...
________ Is the Additional Sum of Money Expected from an ...