Zygot Inc.had $650,000 invested in assets, sales of $1,250,000, operating income amounting to $140,000, and a minimum acceptable rate of return of 12% on its invested assets.The rate of return on investment for Zygot is:
A) 16.2%.
B) 21.5%.
C) 14.5%.
D) 25.0%.

Question

Quizplus · Accepted Answer

The rate of return on investment (ROI) is calculated by dividing the operating income by the invested assets and multiplying by 100 to express it as a percentage.

ROI = (Operating income / Invested assets) x 100

ROI = ($140,000 / $650,000) x 100

ROI = 21.5%

Therefore, the rate of return on investment for Zygot is 21.5%. The correct choice is B.

Zygot IncHad $650,000 Invested in Assets, Sales of $1,250,000, Operating Income