Alpha Division had the following information: If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)

A) 10.50%
B) 15.79%
C) 18.50%
D) 12.55%

Question

Alpha Division had the following information: If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)
  
A) 10.50% 
B) 15.79% 
C) 18.50% 
D) 12.55%

Quizplus · Accepted Answer

SUPPORTING CALCULATIONS:
 Alpha's ROI = Operating income in Alpha Division / (Asset base in Alpha division - Decrease in asset base in Alpha Division) = $60,000 / ($500,000 - $120,000) = 15.79%

Alpha Division Had the Following Information: If the Asset Base