An investment center generated a contribution margin of $400000 fixed costs of $200000 and sales of $2000000. The center's average operating assets were $800000. How much is the return on investment?
A) 25%
B) 175%
C) 50%
D) 75%

Question

Quizplus · Accepted Answer

The return on investment (ROI) is calculated as the net operating income divided by the average operating assets. Net operating income is the contribution margin minus fixed costs, which is $400,000 - $200,000 = $200,000. Therefore, ROI = ($200,000 / $800,000) * 100 = 25%.

An Investment Center Generated a Contribution Margin of $400000 Fixed