Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: $\begin{array}{cc}
& \text { Retall D1vislon }&\text { Wholesale} \
&&\text { Division}\
\text { Operating income } & \$ 2,500,000 &\$6,000,000\
\text { Operating assets } & \$ 16,000,000&\$36,000,000
\end{array}$ Terra Company has set a target return on investment (ROI) of 15% for both divisions. Based on ROI, which division appears to have performed better?
A) Retail division.
B) Wholesale division.
C) Both divisions have the same results.
D) The answer cannot be determined using the information provided.

Question

Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: $\begin{array}{cc} 
& \text { Retall D1vislon }&\text { Wholesale} \
&&\text { Division}\
\text { Operating income } & \$ 2,500,000 &\$6,000,000\
\text { Operating assets } & \$ 16,000,000&\$36,000,000
\end{array}$ Terra Company has set a target return on investment (ROI) of 15% for both divisions. Based on ROI, which division appears to have performed better?
A) Retail division.
B) Wholesale division.
C) Both divisions have the same results.
D) The answer cannot be determined using the information provided.

Quizplus · Accepted Answer

The Wholesale Division has a higher ROI of 20% compared to the Retail Division's ROI of 10%. Therefore, the Wholesale Division has performed better in terms of meeting the ROI target of 15%.

Terra Company Has Two Divisions, the Retail Division and the Wholesale