Big Inc.had $275,000 invested in assets, sales of $302,500, operating income of $60,500, and a minimum acceptable rate of return of 5% on its invested assets.The rate of return on investment for Big Inc.is:
A) 22%.
B) 20%.
C) 32%.
D) 6.4%.

Question

Quizplus · Accepted Answer

The rate of return on investment (ROI) is calculated by dividing the operating income by the invested assets. For Big Inc., this is $60,500 / $275,000 = 0.22, or 22%.

Big IncHad $275,000 Invested in Assets, Sales of $302,500, Operating Income