Question

The ABC Division of K Company last period generated an ROI of 20%, on sales of $10 million. Average assets of the division last year were $250,000. Given this information, the return on sales (ROS) realized by XYZ during the period (in percentage terms, rounded to one decimal place) was ______.

Option 1:
15.0%

Option 2:
25.0%

Option 3:
12.0%

Option 4:
18.0%

Answer 1

The calculated return on sales (ROS) based on the provided information was 0.5%, which does not match any of the answer options, indicating a possible typo or error in the question's data.

Step-by-step explanation:

The student asked what the return on sales (ROS) was for ABC Division of K Company, which had an ROI of 20% on sales of $10 million and average assets of $250,000. To calculate ROS, we can follow the formula: ROS = Net Profit / Sales. However, we're missing net profit, which is typically calculated by multiplying ROI by the average assets. Therefore, Net Profit would be 20% of $250,000, which equals $50,000. Now we can calculate ROS: $50,000 / $10,000,000 = 0.005, or 0.5%. This does not correspond to any of the options provided, suggesting there might be a typo or miscommunication in the data provided in the question. Based on the given data, none of the options can be deemed correct.