Terra Company has two divisions,the Retail Division and the Wholesale Division.The following information was gathered for the two divisions for the current year: $\begin{array}{|l|lr|lr|}
\hline & {\text { Retail Division }} & &{\text { Wholesale Division }} \
\hline \text { Operating income } & \$ & 2,500,000 & \$ & 6,000,000 \
\hline \text { Operating assets } & \$ & 16,000,000 & \$ & 36,000,000 \
\hline
\end{array}$ Assuming that these are the only divisions of Terra Company,what is the ROI for the company as a whole?
A) 15.7%
B) 16.3%
C) 16.6%
D) 32.3%

Question

Quizplus · Accepted Answer

The ROI (Return on Investment) for the company as a whole is calculated by dividing the total operating income by the total operating assets. Total operating income is $2,500,000 + $6,000,000 = $8,500,000. Total operating assets are $16,000,000 + $36,000,000 = $52,000,000. ROI = ($8,500,000 / $52,000,000) * 100% = 16.3%.

Terra Company Has Two Divisions,the Retail Division and the Wholesale