Parkinson Ladders Company provides the following financial information: $$\begin{array} { | l | r | }
\hline \text { Income from operations } & \$ 300,000 \
\hline \text { Interest expense } & 48,000 \
\hline \text { Gains/(losses) on sale of equipment } & 2,600 \
\hline \text { Net income } & 249,400 \
\hline \text { Total assets at Jan. 1 } & 2,900,000 \
\hline \text { Total assets at Dec .31 } & 3,500,000 \
\hline
\end{array}$$ Calculate return on investment based on the information given above.(Round your answer to two decimal places.)

Question

Parkinson Ladders Company provides the following financial information: $$\begin{array} { | l | r | } 
\hline \text { Income from operations } & \$ 300,000 \
\hline \text { Interest expense } & 48,000 \
\hline \text { Gains/(losses) on sale of equipment } & 2,600 \
\hline \text { Net income } & 249,400 \
\hline \text { Total assets at Jan. 1 } & 2,900,000 \
\hline \text { Total assets at Dec .31 } & 3,500,000 \
\hline
\end{array}$$ Calculate return on investment based on the information given above.(Round your answer to two decimal places.)

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Net Income divided by Average Total Assets. Average Total Assets = (2,900,000 + 3,500,000) / 2 = 3,200,000. ROI = 249,400 / 3,200,000 = 0.0779375 or 7.79%.

Parkinson Ladders Company Provides the Following Financial Information Calculate Return on Investment Based on the Information Given Above