Carter Company reported the following financial numbers for one of its divisions for the year;average total assets of $4,100,000;sales of $4,525,000;cost of goods sold of $2,550,000;and operating expenses of $1,372,000.Compute the division's return on investment:
A)30.3%.
B)23.6%.
C)13.3%.
D)10.4%.
E)14.7%.

Question

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as (Net Operating Income / Average Total Assets). Net Operating Income is Sales - Cost of Goods Sold - Operating Expenses = $4,525,000 - $2,550,000 - $1,372,000 = $603,000. ROI = $603,000 / $4,100,000 = 14.7%.

Carter Company Reported the Following Financial Numbers for One of Its