Selected data from Division A of Green Company are as follows:
$\begin{array}{lcc}
\text { Sales } & \$ & 500,000 \
\text { Average investment } & \$ & 300,000 \
\text { Operating income } & \$ & 60,000 \
\text { Minimum rate of return } & & 15 \%
\end{array}$
Division A's return on investment (ROI) is:
A)1.8%.
B)7.5%.
C)12.0%.
D)20.0%.
E)48.0%.

Question

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Operating Income divided by Average Investment. For Division A, ROI = $60,000 / $300,000 = 0.20 or 20%.

Selected Data from Division a of Green Company Are as Follows