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

Question

Quizplus · Accepted Answer

Return on total assets is calculated by dividing net income by the ending total assets or average invested assets. Option D uses the latter formula, making it the correct choice.

Calculating Return on Total Assets for an Investment Center Is