Grady Corporation provides the following financial information: $$\begin{array} { | l | r | }
\hline \text { Minimum acceptable operating income } & \$ 556,600 \
\hline \text { Average total assets } & \$ 2,000,000 \
\hline \text { Operating income } & \$ 708,000 \
\hline \text { Return on investment } & 35.40 \% \
\hline \text { Net sales } & \$ 900,000 \
\hline
\end{array}$$ Calculate the target rate of return.(Round your answer to two decimal places. )
A)27.83%
B)78.67%
C)35.40%
D)61.84%

Question

Grady Corporation provides the following financial information: $$\begin{array} { | l | r | } 
\hline \text { Minimum acceptable operating income } & \$ 556,600 \
\hline \text { Average total assets } & \$ 2,000,000 \
\hline \text { Operating income } & \$ 708,000 \
\hline \text { Return on investment } & 35.40 \% \
\hline \text { Net sales } & \$ 900,000 \
\hline
\end{array}$$ Calculate the target rate of return.(Round your answer to two decimal places. )
A)27.83%
B)78.67%
C)35.40%
D)61.84%

Quizplus · Accepted Answer

The target rate of return is calculated as (Minimum acceptable operating income / Average total assets) * 100 = (556,600 / 2,000,000) * 100 = 27.83%.

Grady Corporation Provides the Following Financial Information Calculate the Target Rate of Return