Barrera Corporation provides the following financial information: $$\begin{array} { | l | r | }
\hline \text { Minimum acceptable operating income } & \$ 556,600 \
\hline \text { Average total assets } & \$ 2,600,000 \
\hline \text { Operating income } & \$ 708,000 \
\hline \text { Return on investment } & 27,23 \% \
\hline \text { Net sales } & \$ 900,000 \
\hline
\end{array}$$ Calculate the target rate of return.(Round your answer to two decimal places.)

Question

Barrera Corporation provides the following financial information: $$\begin{array} { | l | r | } 
\hline \text { Minimum acceptable operating income } & \$ 556,600 \
\hline \text { Average total assets } & \$ 2,600,000 \
\hline \text { Operating income } & \$ 708,000 \
\hline \text { Return on investment } & 27,23 \% \
\hline \text { Net sales } & \$ 900,000 \
\hline
\end{array}$$ Calculate the target rate of return.(Round your answer to two decimal places.)

Quizplus · Accepted Answer

The target rate of return is calculated as the minimum acceptable operating income divided by average total assets: $ \frac{556,600}{2,600,000} \times 100 = 21.41\% $.

Barrera Corporation Provides the Following Financial Information Calculate the Target Rate of Return