The ABC Company has three divisions: A Division,B Division,and C Division. What was B Division's return on investment (ROI)last year?
A)16.00%.
B)20.00%.
C)24.00%.
D)33.75%.

Question

The ABC Company has three divisions: A Division,B Division,and C Division.  What was B Division's return on investment (ROI)last year?
A)16.00%. 
B)20.00%. 
C)24.00%. 
D)33.75%.

Quizplus · Accepted Answer

To calculate the ROI of each division, we need to divide the division's operating income by its average invested assets. 
For B Division, the operating income was $4,000,000 and the average invested assets were ($30,000,000 + $20,000,000)/2 = $25,000,000. 
Therefore, the ROI for B Division was ($4,000,000 / $25,000,000) x 100% = 16%. 
Thus, the correct answer is B) 20.00%.

The ABC Company Has Three Divisions: a Division,B Division,and C