Crystal Company,a manufacturer of office supplies,provides the following financial information: $$\begin{array} { | l | r | r | }
\hline & \text { Pen Division } & \text { Pencil Division } \
\hline \text { Operating income } & \$ 100,000 & \$ 40,000 \
\hline \text { Net sales } & \$ 450,000 & \$ 200,000 \
\hline \text { Total assets at Jan. 1 } & \$ 560,000 & \$ 255,000 \
\hline \text { Total assets at Dec .31 } & \$ 600,000 & \$ 275,000 \
\hline
\end{array}$$ Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places. )

Question

Crystal Company,a manufacturer of office supplies,provides the following financial information: $$\begin{array} { | l | r | r | } 
\hline & \text { Pen Division } & \text { Pencil Division } \
\hline \text { Operating income } & \$ 100,000 & \$ 40,000 \
\hline \text { Net sales } & \$ 450,000 & \$ 200,000 \
\hline \text { Total assets at Jan. 1 } & \$ 560,000 & \$ 255,000 \
\hline \text { Total assets at Dec .31 } & \$ 600,000 & \$ 275,000 \
\hline
\end{array}$$ Calculate the return on investment for the Pencil Division.(Round your answer to two decimal places. )

Quizplus · Accepted Answer

The return on investment (ROI) is calculated as (Operating Income / Average Total Assets) * 100. For the Pencil Division, the average total assets are (255,000 + 275,000) / 2 = 265,000. Thus, ROI = (40,000 / 265,000) * 100 = 15.09%.

Crystal Company,a Manufacturer of Office Supplies,provides the Following Financial Information