Question

CommercialServices Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales $ 3,000,000 Net operating income $ 150,000 Average operating assets $ 750,000 The following questions are to be considered independently. Garrison 16e Rechecks 2019-01-10 Required: 1. Compute the company's return on investment (ROI).

Answer 1

The answer is 0.20 or 20%

Step-by-step explanation:

Solution

Given that:

The sales = $ 3,000,000

The Net operating income= $150,000

The Average operating assets =$ 750,000

The next step is to calculate the company return rate of investment

Thus,

The return of investment is stated as follows:

the return of investment = Net operating income divided by the average operating assets * 100

= $150,000/$750,000

= 0.2 * 100

= 20 %

Therefore, the company's ROI is 20%