Answer the following questions using the information below:
The Bandage Medical Supply Company has two divisions that operate independently of one another. The financial data for the year 2014 reported the following results:
The company's desired rate of return is 10%. Income is defined as operating income.
-What are the respective return-on-investment ratios for the North and South Divisions?
A) 0.125 and 0.110
B) 0.125 and 0.150
C) 0.108 and 0.075
D) 0.110 and 0.125

Question

Answer the following questions using the information below:
The Bandage Medical Supply Company has two divisions that operate independently of one another. The financial data for the year 2014 reported the following results:
  The company's desired rate of return is 10%. Income is defined as operating income.
-What are the respective return-on-investment ratios for the North and South Divisions?
A) 0.125 and 0.110 
B) 0.125 and 0.150 
C) 0.108 and 0.075 
D) 0.110 and 0.125

Quizplus · Accepted Answer

The return-on-investment (ROI) ratio is calculated by dividing the net profit by the total investment. The correct ratios for the North and South Divisions are 0.125 and 0.110, respectively.

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