Question

Scribe​ Company, a manufacturer of writing​ instruments, provides the following financial​ information: Pen Division Pencil Division Operating income $ 100 comma 000 $ 40 comma 000 Net sales $ 500 comma 000 $ 175 comma 000 Total assets at Jan. 1 $ 560 comma 000 $ 300 comma 000 Total assets at Dec .31 $ 610 comma 000 $ 275 comma 000 Calculate the return on investment for the Pencil Division.​ (Round your answer to two decimal​ places.)

Answer 1

The return on investment for the Pencil Division is 14,55% (two decimal​ places.)

Step-by-step explanation:

The Return on Investments is calculated as ;

Return on Investments = Divisional Profit Contribution / Assets Employed in the Division

= $40,000 / $275,000 × 100

= 14,545454 or 14,55% (two decimal​ places.)

Conclusion :

The return on investment for the Pencil Division is 14,55% (two decimal​ places.)