Question

Two investment centers at Marshman Corporation have the following current-year income and asset data:

Investment Investment
Center A Center B
Investment center income $415,000 $525,000
Investment center average invested assets $2,400,000 $1,950,000
The return on investment (ROI) for Investment Center B is:__________
a) 371.4%
b) 26.9%
c) 24.1%
d) 39.2%

Answer 1

b) 26.9%

Step-by-step explanation:

Computation of the return on investment (ROI) for Investment Center B

Using this formula

Return on investment (ROI) =Investment center income/Investment center average invested assets

Let plug in the formula

Return on investment (ROI) =$525,000/$1,950,000

Return on investment (ROI) = 0.269×100

Return on investment (ROI) = 26.9%

Therefore the return on investment (ROI) for Investment Center B is 26.9%