Answer the following questions using the information below:
Judith Vending Company has invested $800,000 in a plant to make vending machines. The target operating income desired from the plant is $120,000 annually. The company plans annual sales of 1,200 vending machines at a selling price of $1,000 each.
-What is the target rate of return on investment for Judith Vending Company?
A) 18.0%
B) 15.0%
C) 14.0%
D) 66.7%

Question

Quizplus · Accepted Answer

The target rate of return is calculated as the target operating income divided by the investment. Here, $120,000 / $800,000 = 0.15 or 15.0%.

Answer the Following Questions Using the Information Below