Weston Company had sales revenue and operating expenses of $5,000,000 and $4,200,000,respectively,for the year just ended.If invested capital amounted to $6,000,000,the firm's ROI was:

Question

Quizplus · Accepted Answer

ROI (Return On Investment) is calculated by dividing Net Operating Profit after Taxes (NOPAT) by Invested Capital.

NOPAT = Sales Revenue - Operating Expenses - Taxes
= $5,000,000 - $4,200,000 - $0
= $800,000

ROI = NOPAT / Invested Capital x 100%
= $800,000 / $6,000,000 x 100%
= 13.33%

Therefore, the answer is A) 13.33%.

Weston Company Had Sales Revenue and Operating Expenses of $5,000,000