The following information pertains to Alan Company: $$\begin{array} { l r }
\text { Total assets } & \$ 100,000 \
\text { Total current liabilities } & 30,000 \
\text { Total expenses } & 60,000 \
\text { Total liabilities } & 35,000 \
\text { Total revenues } & 80,000
\end{array}$$ If invested capital is defined as total assets, the return on investment is _____.
A)160%
B)60%
C)70%
D)20%

Question

The following information pertains to Alan Company: $$\begin{array} { l r } 
\text { Total assets } & \$ 100,000 \
\text { Total current liabilities } & 30,000 \
\text { Total expenses } & 60,000 \
\text { Total liabilities } & 35,000 \
\text { Total revenues } & 80,000
\end{array}$$ If invested capital is defined as total assets, the return on investment is _____.
A)160%
B)60%
C)70%
D)20%

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as (Net Income / Invested Capital) * 100. Net Income = Total Revenues - Total Expenses = $80,000 - $60,000 = $20,000. Invested Capital = Total Assets = $100,000. ROI = ($20,000 / $100,000) * 100 = 20%.

The Following Information Pertains to Alan Company If Invested Capital Is Defined as Total Assets, the Return