Last year the Uptown Division of Gorcen Enterprises had sales of $300,000 and a net operating income of $24,000. The average operating assets at Uptown last year amounted to $120,000. Last year at Uptown the return on investment was:
A)8%
B)12%
C)20%
D)40%

Question

Quizplus · Accepted Answer

The formula for calculating the return on investment (ROI) is:

ROI = Net Operating Income / Average Operating Assets

Substituting the given values, we get:

ROI = $24,000 / $120,000 = 0.20 or 20%

Therefore, the correct answer is C) 20%.

Last Year the Uptown Division of Gorcen Enterprises Had Sales