Robichau Inc. reported the following results from last year's operations: At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:
The company's minimum required rate of return is 20%.
The ROI for this year's investment opportunity considered alone is closest to:
A) 51.0%
B) 50.0%
C) 10.0%
D) 17.0%

Question

Robichau Inc. reported the following results from last year's operations:  At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:
 The company's minimum required rate of return is 20%.
The ROI for this year's investment opportunity considered alone is closest to:
A) 51.0% 
B) 50.0% 
C) 10.0% 
D) 17.0%

Quizplus · Accepted Answer

11eacbfc_c519_0688_8ffe_937aadfe1a38_TB7552_00 ROI = Net operating income ÷ Average operating assets = $153,000 ÷ $900,000 = 17.0%