Answer:
10.70%
Explanation:
Data provided in the question:
Asset base in Mycrux Company = $987,500
Net income in Mycrux Company = $105,700
Weighted average cost of capital = 12%
Target return on investment (ROI) = 15%
Margin for Mycrux Company = 20%
Now,
Return on investment of Mycrux Company = [tex]\frac{\textup{Net income in Mycrux Company}}{\textup{Asset base in Mycrux Company}}\times100\%[/tex]
or
Return on investment of Mycrux Company = [tex]\frac{\textup{105,700}}{\textup{987,500}}\times100\%[/tex]
or
Return on investment of Mycrux Company = 0.1070 × 100%
= 10.70%
