The following information pertains to Bundy Company: $$\begin{array} { l l }
\text { Total assets } & \$ 50,000 \
\text { Total current liabilities } & 30,000 \
\text { Total expenses } & 60,000 \
\text { Total liabilities } & 35,000 \
\text { Total revenues } & 80,000
\end{array}$$ If invested capital is defined as total assets, the return on investment is:
A) 40%
B) 60%
C) 70%
D) 160%

Question

The following information pertains to Bundy Company: $$\begin{array} { l l } 
\text { Total assets } & \$ 50,000 \
\text { Total current liabilities } & 30,000 \
\text { Total expenses } & 60,000 \
\text { Total liabilities } & 35,000 \
\text { Total revenues } & 80,000
\end{array}$$ If invested capital is defined as total assets, the return on investment is:
A) 40%
B) 60%
C) 70%
D) 160%

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as (Net Income / Invested Capital). Net Income = Total Revenues - Total Expenses = $80,000 - $60,000 = $20,000. Invested Capital = Total Assets = $50,000. ROI = ($20,000 / $50,000) * 100% = 40%.

The Following Information Pertains to Bundy Company If Invested Capital Is Defined as Total Assets, the Return