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: 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

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:  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%

Quizplus · Accepted Answer

ROI = Operating income ÷ Operating assets
ROI = ($2,500,000 + $6,000,000) ÷ ($16,000,000 + $36,000,000) = 16.3%

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