Lewis Company has operating income of $336,000. Its return on investment (ROI)is 48%, while its target rate of return is 10%. The total assets of Lewis Company would be closest to
A)$33,600.
B)$3,360,000.
C)$161,280.
D)$700,000.

Question

Quizplus · Accepted Answer

ROI is calculated as Operating Income / Total Assets. Rearranging the formula to find Total Assets gives Total Assets = Operating Income / ROI. Substituting the given values: Total Assets = $336,000 / 0.48 = $700,000.

Lewis Company Has Operating Income of $336,000