The following information pertains to the Twix Division, which operates as an investment center:
What were Twix Division's net assets?
A) $16,000,000
B) $32,333,333
C) $25,000,000
D) $24,000,000

Question

The following information pertains to the Twix Division, which operates as an investment center:
 What were Twix Division's net assets?
A) $16,000,000 
B) $32,333,333 
C) $25,000,000 
D) $24,000,000

Quizplus · Accepted Answer

ROI = Investment T/O x Return on sales
8% = ($8,000,000 / Asset base) x ($2,000,000 / $8,000,000)
8% = $2,000,000 / Asset base
Asset base = $2,000,000 / 0.08
Asset base = $25,000,000

The Following Information Pertains to the Twix Division, Which Operates