Lewis Company has operating income of $120,000. Its return on investment (ROI)is 40%, while its target rate of return is 7%. The total assets of Lewis Company may be closest to
A)$8400.
B)$1,714,286.
C)$48,000.
D)$300,000.

Question

Quizplus · Accepted Answer

The ROI is calculated as Operating Income / Total Assets. Given ROI is 40% and Operating Income is $120,000, Total Assets = $120,000 / 0.40 = $300,000.

Lewis Company Has Operating Income of $120,000