Walnut Company has sales of $1,000,000 and total expenses of $900,000. If operating assets are $500,000, the return on investment is:

Question

Quizplus · Accepted Answer

The formula for return on investment is (Net Income / Operating Assets) x 100%. In this case, the net income is $100,000 ($1,000,000 in sales - $900,000 in expenses), and the operating assets are $500,000. Therefore, the return on investment is (100,000 / 500,000) x 100% = 20%. Therefore, the correct answer is B).

Walnut Company Has Sales of $1,000,000 and Total Expenses of $900,000