Answer the following questions using the information below:
Timothy Company has invested $1,000,000 in a plant to make vending machines. The target operating income desired from the plant is $150,000 annually. The company plans annual sales of 1,500 vending machines at a selling price of $1,000 each.
-What is the target rate of return on investment for Timothy Company?
A)15.0%
B)17.6%
C)10.0%
D)11.1%

Question

Quizplus · Accepted Answer

The target rate of return on investment is calculated as the target operating income divided by the investment. Here, it is $150,000 / $1,000,000 = 15.0%.

Answer the Following Questions Using the Information Below