The following data are for the Akron Division of Consolidated Rubber, Inc.: $\begin{array}{lrr}
\text { Sales } & \$ & 750,000 \
\text { Net operating income } & \$ & 45,000 \
\text { Average operating assets } & \$ & 250,000 \
\text { Stockholder's' equity } & \$ & 75,000 \
\text { Residual income } & \$ & 15,000
\end{array}$ For the past year, the return on investment was:
A) 6%
B) 30%
C) 18%
D) 26%

Question

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Net Operating Income divided by Average Operating Assets. Here, ROI = $45,000 / $250,000 = 0.18 or 18%.

The Following Data Are for the Akron Division of Consolidated