Question

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)

Answer 1

Answer:

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%.

Answer 2

Answer:

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.