Real Wood Structures Company has invested $1,040,000 in a plant to build small tool sheds. The target operating income desired from the plant is $156,000 annually. The company plans annual sales of 1200 sheds at a selling price of $1100 each.
What is the target rate of return on investment for Real Wood Structures Company?
A) 18.0%
B) 15.0%
C) 11.8%
D) 85.0%

Question

Quizplus · Accepted Answer

Target rate of return = $156,000 / $1,040,000 = 15%

Real Wood Structures Company Has Invested $1,040,000 in a Plant