The following information pertains to Kumperor Company:
$\begin{array}{ll}
\text { Average total assets } & \$ 100,000 \
\text { Total current liabilities } & \$ 30,000 \
\text { Total expenses } & \$ 60,000 \
\text { Total liabilities } & \$ 35,000 \
\text { Total revenues } & \$ 80,000
\end{array}$
Invested capital is defined as total assets.What is the return on investment?
A) 20%
B) 60%
C) 70%
D) 160%

Question

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Net Income divided by Average Total Assets. Net Income is Total Revenues minus Total Expenses, which is $80,000 - $60,000 = $20,000. With Average Total Assets of $100,000, ROI = ($20,000 / $100,000) * 100% = 20%.

The Following Information Pertains to Kumperor Company Invested Capital Is Defined as Total Assets