Question

Given the following data: average operating assets $ 2,200,000 total liabilities $ 396,000 sales $ 1,650,000 contribution margin $ 990,000 net operating income $ 396,000 return on investment (roi) is: multiple choice

a. 45.0%
b. 24.0%
c. 60.0%
d. 18.0%

Answer 1

Return on Investment (ROI) is a financial ratio that measures the profitability of an investment, relative to its cost. In this case, the ROI is 18.0%. Therefore, the correct option is D.

Step-by-step explanation:

Return on Investment (ROI) is a financial ratio that measures the profitability of an investment, relative to its cost. It represents the net operating income generated from the average operating assets. To calculate ROI, divide the net operating income by the average operating assets and multiply by 100 to express it as a percentage.

In this case, the net operating income is $396,000 and the average operating assets are $2,200,000. Therefore, the ROI is calculated as follows:

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

Substituting the given values:

ROI = ($396,000 / $2,200,000) x 100 = 18.0%

Therefore, the correct answer is option d) 18.0%.