Beta Division had the following information:
$$\begin{array} { l r }
\text { Asset base in Beta Division } & \$ 400,000 \
\text { Net income in Beta Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Beta Division } & 20 \%
\end{array}$$
-Refer to the figure.What is the return on investment of Beta Division?
A)12.5%
B)20.0%
C)62.5%
D)800.0%

Question

Beta Division had the following information:
$$\begin{array} { l r } 
\text { Asset base in Beta Division } & \$ 400,000 \
\text { Net income in Beta Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Beta Division } & 20 \%
\end{array}$$
-Refer to the figure.What is the return on investment of Beta Division?
A)12.5%
B)20.0%
C)62.5%
D)800.0%

Quizplus · Accepted Answer

The return on investment (ROI) for Beta Division is calculated as Net Income / Asset Base = $50,000 / $400,000 = 0.125 or 12.5%.

Beta Division Had the Following Information -Refer to the Figure