BR Company has a contribution margin of 9%. Sales are $477,000, net operating income is $42,930, and average operating assets are $134,000. What is the company's return on investment (ROI)

Question

Business

Immanuel

13 May, 10:08

BR Company has a contribution margin of 9%. Sales are $477,000, net operating income is $42,930, and average operating assets are $134,000. What is the company's return on investment (ROI)

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Answers (2)

Know the Answer?

Dillon Floyd · Answer 1

32.03%

Explanation:

Given that,

Contribution margin = 9%

Sales = $477,000

Net operating income = $42,930

Average operating assets = $134,000

The company's return on investment is determined by dividing the net operating income of this company by the average operating assets.

Return on investment:

= Net operating income : Average operating assets * 100

= ($42,930 : $134,000) * 100

= 32.03%

Therefore, the company's return on investment (ROI) is 32.03%.

Gianni Parrish · Answer 2

32.03%

Explanation:

Data provided as per the question

Net operating income = $42,930

Average operating assets = $134,000

The computation of return on investment (ROI) is shown below:-

Return on investment = net operating income : average operating assets

$42,930 : $134,000

= 32.03%

Therefore for computing the return on investment we simply divide average operating assets by net operating income.