Daab Products is a division of a major corporation. The following data are for the most recent year of operations: The division's return on investment (ROI) is closest to:
A)10.8%
B)41.5%
C)0.3%
D)2.2%

Question

Daab Products is a division of a major corporation. The following data are for the most recent year of operations:  The division's return on investment (ROI) is closest to:
A)10.8% 
B)41.5% 
C)0.3% 
D)2.2%

Quizplus · Accepted Answer

Return on investment (ROI) = Net Income / Average Total Assets. From the given data, the net income is $78,000 and average total assets are $722,000 (($680,000 beginning assets + $764,000 ending assets) / 2). Therefore, ROI = $78,000 / $722,000 = 10.8% (rounded to one decimal place). The closest answer choice is A.

Daab Products Is a Division of a Major Corporation