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

11ea7998_5c87_1d1e_911b_1de2892eae0d_TB2627_00_TB2627_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%