Cornwall Company has two divisions, A and B. Information for each division is as follows: What is the return on investment for A?
A) 18%
B) 40%
C) 20%
D) 15%

Name: Cornwall Company has two divisions, A and B. Information for each division is as follows: What is the return on investment for A? A) 18% B) 40% C) 20% D) 15%
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Question

Cornwall Company has two divisions, A and B. Information for each division is as follows:  What is the return on investment for A?
A) 18% 
B) 40% 
C) 20% 
D) 15%

Quizplus · Accepted Answer

ROI for division A = Operating Income / Average Total Assets
= (600,000 - 300,000) / [(1,200,000 + 800,000)/2]
= 40%

Cornwall Company Has Two Divisions, a and B