Question

In: Accounting

What is the Return on Investment for the division below Division Operating Income $300,000 Total Assets...

What is the Return on Investment for the division below

Division
Operating Income $300,000
Total Assets Jan 1 $900,000
Total Assets Dec 31 $850,000

Solutions

Expert Solution

Return on Investment = Net Operating income / Average Assets x 100

                                                = $300,000 / $ 875000 x 100

                                                = 34.2857% or

                                                = 34.29%

Average Assets = ($900,000 + $850,000) / 2

                                = $875,000


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