Question

The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $5,400,000 $30,000,000 Commercial Division 6,250,000 25,000,000 Internet Division 1,800,000 12,000,000 a. Compute the return on investment for each division.

Answer 1

Retail Division = 18 %

Commercial Division = 25 %

Internet Division = 15 %

Step-by-step explanation:

Return on Investment = Net Income / Assets employed x 100

therefore,

Retail Division = $5,400,000 / $30,000,000 x 100

= 18 %

Commercial Division = $6,250,000 / $25,000,000 x 100

= 25 %

Internet Division = $1,800,000 / $12,000,000 x 100

= 15 %