BR Company has a contribution margin of 40%. Sales are $312,500, net operating income is $25,000, and average operating assets are $200,000. What is the company's return on investment (ROI)?
A) 12.5%
B) 62.5%
C) 8.0%
D) 64.0%

Question

Quizplus · Accepted Answer

ROI is calculated as Net Operating Income / Average Operating Assets. Given Net Operating Income is $25,000 and Average Operating Assets are $200,000, ROI = $25,000 / $200,000 = 0.125 or 12.5%.

BR Company Has a Contribution Margin of 40