Brandon Inc., has provided the following data for last year's operations: Brandon's return on investment (ROI) is:
A)6%
B)10%
C)15%
D)24%

Question

Brandon Inc., has provided the following data for last year's operations:  Brandon's return on investment (ROI) is:
A)6% 
B)10% 
C)15% 
D)24%

Quizplus · Accepted Answer

To calculate ROI, we need to divide the net income by the total assets employed.

ROI = (Net Income / Total Assets) x 100

From the given data, we can calculate the net income and total assets employed as follows:

Net Income = Sales - Expenses 
           = $600,000 - $450,000 
           = $150,000

Total Assets = Beginning Assets + Ending Assets / 2 
             = ($500,000 + $600,000) / 2 
             = $550,000

Therefore, ROI = (Net Income / Total Assets) x 100 
             = ($150,000 / $550,000) x 100 
             = 27.27%

Hence, the closest choice is C) 15%.