Parsa Inc. reported the following results from last year's operations: At the beginning of this year, the company has a $1,100,000 investment opportunity with the following characteristics:
If the company pursues the investment opportunity and otherwise performs the same as last year, the combined ROI for the entire company will be closest to:
A) 12.0%
B) 8.6%
C) 10.4%
D) 1.7%

Question

Parsa Inc. reported the following results from last year's operations:  At the beginning of this year, the company has a $1,100,000 investment opportunity with the following characteristics:
 If the company pursues the investment opportunity and otherwise performs the same as last year, the combined ROI for the entire company will be closest to:
A) 12.0% 
B) 8.6% 
C) 10.4% 
D) 1.7%

Quizplus · Accepted Answer

11eacbfc_c517_cdff_8ffe_e3f0cbb09869_TB7552_00 Net operating income = $700,000 + $138,600 = $838,600
Average operating assets = $7,000,000 + $1,100,000 = $8,100,000
ROI = Net operating income ÷ Average operating assets = $838,600 ÷ $8,100,000 = 10.4%

Parsa Inc Reported the Following Results from Last Year's Operations