Condren Inc.reported the following results from last year's operations:
At the beginning of this year,the company has a $1,000,000 investment opportunity with the following characteristics:
If the company pursues the investment opportunity and otherwise performs the same as last year,the combined ROI for the entire company will be closest to:
A) 1.1%
B) 8.6%
C) 9.7%
D) 11.3%

Question

Condren Inc.reported the following results from last year's operations:
 At the beginning of this year,the company has a $1,000,000 investment opportunity with the following characteristics:
 If the company pursues the investment opportunity and otherwise performs the same as last year,the combined ROI for the entire company will be closest to:
A) 1.1% 
B) 8.6% 
C) 9.7% 
D) 11.3%

Quizplus · Accepted Answer

11ea7761_1660_ff36_81a5_1f56f0f1a26d_TB2580_00 Net operating income = $600,000 + $77,000 = $677,000
Average operating assets = $6,000,000 + $1,000,000 = $7,000,000
ROI = Net operating income ÷ Average operating assets = $677,000 ÷ $7,000,000 = 9.7%