Question

Sales $1,520,437 Operating Income $77,792 Total Assets (investment) $500,251 Target Rate of Return (Cost of Capital) 12% What is return on investment?

Answer 1

15.55%

Step-by-step explanation:

The computation of the return on investment is shown below:

Return on investment = Operating Income ÷ Total assets (Investment) × 100

= $77,792 ÷ $500,251 × 100

= 15.55%

It shows the relationship between the operating income and the total assets as an investment so that the correct percentage can come.

All other information which is given is not relevant. Hence, ignored it