Question

Br company has a contribution margin of 18%. sales are $447,000, net operating income is $80,990, and average operating assets are $133,000. what is the company's return on investment (roi)?

a) 39.1%
b) 56.3%
c) 6.9%
d) 60.9%

Answer 1

The Return on Investment (ROI) for BR Company is calculated by dividing its Net Operating Income ($80,990) by its Average Operating Assets ($133,000), resulting in an ROI of approximately 60.9%.

Step-by-step explanation:

The Return on Investment (ROI) of a company is calculated by dividing the Net Operating Income by the Average Operating Assets and then multiplying by 100 to express it as a percentage. In this case, BR Company's ROI can be calculated using the given figures: the Net Operating Income of $80,990 and Average Operating Assets of $133,000.

To calculate the ROI, the following formula is used:

ROI = (Net Operating Income / Average Operating Assets) × 100

Plugging in the numbers provided:

ROI = ($80,990 / $133,000) × 100 ≈ 60.9%

Therefore, BR Company's return on investment is approximately 60.9%.