Question

Express Logistics provides the following​ information: Operating income $ 1 comma 600 comma 000 Net sales $ 13 comma 500 comma 000 Average total assets $ 1 comma 850 comma 000 ​Management's target rate of return 30​% What is the​ company's return on​ investment? (Round your answer to two decimal​ places.) A. 13.70​% B. 86.49​% C. 11.85​% D. 30.00​%

Answer 1

Answer:

Return on investment = 86.49 %

so correct option is B. 86.49%

Explanation:

given data

Operating income =  $1,600,000

Net sales  = $13,500,000

Average total assets = $1,850,000

target rate of return  = 30​%

to find out

company's return on​ investment

solution

we get here Return on investment that is express as

Return on investment = Operating income ÷ Average total assets   .............1

put here value we get

Return on investment = $\frac{1,600,000}{1,850,000}$

Return on investment = 0.86486

Return on investment = 86.49 %

so correct option is B. 86.49%