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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)
  1. 13 May, 10:23
    0
    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%.
  2. 13 May, 14:07
    0
    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.
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