Rickett Company has operating income of $180,000.Its return on investment (ROI)is 30%,while its target r ate of return is 12%.The total assets of Rickett Company would be closest to:
A)$ 21,600.
B)$ 54,000.
C)$ 600,000.
D)$1,500,000.

Question

Quizplus · Accepted Answer

ROI = Operating Income / Total Assets
Thus, Total Assets = Operating Income / ROI
= $180,000 / 0.30
= $600,000
Therefore, the total assets of Rickett Company would be closest to $600,000, which is option C.

Rickett Company Has Operating Income of $180,000