Scribe Company,a manufacturer of writing instruments,provides the following financial information: $$\begin{array} { | l | r | r | }
\hline & \text { Pen Division } & \text { Pencil Division } \
\hline \text { Operating income } & \$ 100,000 & \$ 40,000 \
\hline \text { Net sales } & \$ 500,000 & \$ 175,000 \
\hline \text { Total assets at Jan. 1 } & \$ 580,000 & \$ 255,000 \
\hline \text { Total assets at Dec .31 } & \$ 700,000 & \$ 275,000 \
\hline
\end{array}$$ Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places.)

Question

Scribe Company,a manufacturer of writing instruments,provides the following financial information: $$\begin{array} { | l | r | r | } 
\hline & \text { Pen Division } & \text { Pencil Division } \
\hline \text { Operating income } & \$ 100,000 & \$ 40,000 \
\hline \text { Net sales } & \$ 500,000 & \$ 175,000 \
\hline \text { Total assets at Jan. 1 } & \$ 580,000 & \$ 255,000 \
\hline \text { Total assets at Dec .31 } & \$ 700,000 & \$ 275,000 \
\hline
\end{array}$$ Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places.)

Quizplus · Accepted Answer

The return on investment (ROI) is calculated as (Operating Income / Average Total Assets) * 100. For the Pencil Division, the average total assets are (255,000 + 275,000) / 2 = 265,000. Thus, ROI = (40,000 / 265,000) * 100 = 15.09%.

Scribe Company,a Manufacturer of Writing Instruments,provides the Following Financial Information