Macey, Inc.'s investment center had average operating assets of $350,000, revenues of $1,050,000 and net operating income of $70,000. Return on investment is Blank______.Multiple choice question.5%20%10%6.7%
Question
Macey, Inc.'s investment center had average operating assets of 1,050,000 and net operating income of $70,000. Return on investment is Blank______.Multiple choice question.5%20%10%6.7%
Solution
The Return on Investment (ROI) is calculated by dividing the Net Operating Income by the Average Operating Assets and then multiplying by 100 to get the percentage.
Here's the step-by-step calculation:
- Identify the Net Operating Income, which is $70,000.
- Identify the Average Operating Assets, which is $350,000.
- Divide the Net Operating Income by the Average Operating Assets: 350,000 = 0.2
- Multiply by 100 to get the percentage: 0.2 * 100 = 20%
So, the Return on Investment (ROI) is 20%.
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