Question

Jamison Company had sales revenue and operating expenses of $5,000,000 and $4,200,000, respectively, for the year just ended. If invested capital amounted to $6,000,000, the firm's ROI was:__________.

Answer 1

ROI of the firm will be 13.33 %

Step-by-step explanation:

We have given sales revenue = $5000000

Operating expenses = $4200000

So net income will be equal to difference of sales revenue and operating expenses

So net income = $5000000-$420000 = $800000

Capital investment is given $6000000

We have to find the Firm's ROI

ROI is equal to ratio of net income and capital investment

So ROI will be equal to
`=(800000)/(6000000)=0.1333=13.33` %

So ROI of the firm will be 13.33 %