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16 April, 10:25

Babak Industries is a division of a major corporation. Last year the division had total sales of $19,560,000, net operating income of $1,877,760, and average operating assets of $6,000,000. The division's return on investment (ROI) is closest to: Multiple Choice A. 7.3% B. 23.8% C. 31.3% D. 3.0%

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  1. 16 April, 11:15
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    Option (C) is correct.

    Explanation:

    Given that,

    Total sales = $19,560,000

    Net operating income = $1,877,760

    Average operating assets = $6,000,000

    Return on Investment (ROI):

    = Net operating income : Average operating assets

    = ($1,877,760 : $6,000,000) * 100

    = 0.31296 * 100

    = 31.296% or 31.3%

    Therefore, the division's return on investment (ROI) is closest to 31.3%
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