Question

BR Company has a contribution margin of 8%. Sales are $497,000, net operating income is $39,760, and average operating assets are $135,000. What is the company's return on investment (ROI)?BR Company has a contribution margin of 8%. Sales are $497,000, net operating income is $39,760, and average operating assets are $135,000. What is the company's return on investment (ROI)?

Answer 1

29.45%

Step-by-step explanation:

Return on investment (ROI) is the ratio of a net profit/(loss) made in a financial period to the investment made by the entity in that period expressed as percentage.

Mathematically,

ROI = Net Profit / Total Investment * 100

For the scenario about BR company

ROI = $39,760/$135,000 * 100

= 29.45%

The company's return on investment (ROI) is 29.45%