Blancher Corporation had $495,000 in invested assets,sales of $660,000,income from operations amounting to $99,000,and a desired minimum rate of return of 15%.The rate of return on investment for Stevenson is
A)16%.
B)20%.
C)18%.
D)15%.

Question

Quizplus · Accepted Answer

To find the rate of return on investment, we need to divide the income from operations by the invested assets.

Rate of return = (Income from operations / Invested assets) x 100

Plugging in the values, we get

Rate of return = (99,000 / 495,000) x 100 
Rate of return = 20%

Since the desired rate of return is 15% and the actual rate of return is 20%, the investment is performing better than expected. Therefore, the best choice is B.

Blancher Corporation Had $495,000 in Invested Assets,sales of $660,000,income from Operations