Powell Enterprises has operating income of $72,000. Its return on investment (ROI) is 36%, while its target rate of return is 10%. The total assets of Powell Enterprises would be closest to

Question

Quizplus · Accepted Answer

To calculate the total assets of Powell Enterprises, we can use the formula: ROI = Operating Income / Total Assets
Rearranging the formula, we get: Total Assets = Operating Income / ROI
Plugging in the values given, we get: Total Assets = $72,000 / 0.36 = $200,000.
Therefore, the closest option is C) $200,000.

Powell Enterprises Has Operating Income of $72,000