The following information is available for the Paul Ryan Company:
$\begin{array}{ll}
\text { Sales for year } & \$ 150,000 \
\text { Average invested capital for year } & \$ 156,250 \
\text { Returnon investment } & 10 \%
\end{array}$
What is the return on sales?
A) 10.00%
B) 10.42%
C) 62.50%
D) 100.00%

Question

Quizplus · Accepted Answer

The return on sales is calculated by dividing the net income by sales. Given a return on investment (ROI) of 10% and an average invested capital of $156,250, the net income is $15,625 (10% of $156,250). Therefore, the return on sales is $15,625 / $150,000 = 10.42%.

The Following Information Is Available for the Paul Ryan Company