Calculating return on investment for an investment center is defined by the following formula:
A) Income/Average invested assets.
B) Net income/Ending assets.
C) Contribution margin/Average invested assets.
D) Contribution margin/Ending assets.
E) Gross profit/Ending assets.

Question

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as income (usually operating income) divided by average invested assets. This formula is used to measure the profitability of an investment center.

Calculating Return on Investment for an Investment Center Is Defined