Question

The following information pertains to Lessor Company: Total assets $150,000 Total current liabilities 110,000 Total expenses 160,000 Total liabilities 115,000 Total revenues 180,000 If invested capital is defined as total assets, a project earning an ROI of 12% should be _____.

Answer 1

Answer:

Achieved. The ROI currently is 13.33% So the prohect earning a ROI of 12% was accomplished

Explanation:

Return on Investment will be  Income/ Investment Capital

Which in this case is defined as total assets.

So it would be Income / Total Assets

The last is a given figure: 150,000

Now let's first find out the income:

180,000 revenues - 160,000 expenses = 20,000 net income

Finally calculate the ROI  20,000/ 150,000 = 13.33%