Anguiano Inc.reported the following results from last year's operations: The company's average operating assets were $5,000,000.

Last year's return on investment (ROI)was closest to:
A)7.0%
B)14.7%
C)45.8%
D)47.6%

Question

Anguiano Inc.reported the following results from last year's operations:  The company's average operating assets were $5,000,000.

Last year's return on investment (ROI)was closest to:
A)7.0% 
B)14.7% 
C)45.8% 
D)47.6%

Quizplus · Accepted Answer

ROI = Net Operating Income / Average Operating Assets

From the information given: 
Net Operating Income = $735,000 
Average Operating Assets = $5,000,000

Therefore, ROI = $735,000 / $5,000,000 = 0.147 or 14.7%

The closest option is B, 14.7%. ROI = Net operating income ÷ Average operating assets = $735,000 ÷ $5,000,000 = 14.7%