Chavin Company had the following results during August: net operating income, $220,000; turnover, 5; and return on investment (ROI) 25%. Chavin Company's average operating assets were:
A) $880,000
B) $44,000
C) $55,000
D) $1,100,000

Question

Quizplus · Accepted Answer

ROI is calculated as Net Operating Income / Average Operating Assets. Given an ROI of 25% and a net operating income of $220,000, we can rearrange the formula to solve for Average Operating Assets: $220,000 / 0.25 = $880,000.

Chavin Company Had the Following Results During August: Net Operating