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Campbell Candy Corporation desires a 16% return on investment on all operations. The following information was available for the company for the current year. Sales $250,000 Operating Income $70,000 Turn over 0.6% What is he corporation's ROI? A) Impossible to determine from the information given. B) 28% C) 16.8% D) 32%

Respuesta :

Answer:

corporation's ROI = 16.8 %

Explanation:

given data

return on investment = 16%

Operating Income = $70,000

Sales = $250,000

Turn over =  0.6%

to find out

What is he corporation's ROI

solution

we get here Average operating assets that is express as

Average operating assets = [tex]\frac{Sales}{Turn\ over}[/tex]

Average operating assets = [tex]\frac{250000}{0.6}[/tex]

Average operating assets = 416666.6667

so corporation's ROI will be  

corporation's ROI = [tex]\frac{Operating\ income}{Average\ operating\ assets}[/tex]

corporation's ROI = [tex]\frac{70000}{416666.6667}[/tex]

corporation's ROI = [tex]\frac{70000}{416666.6667}[/tex]

corporation's ROI = 16.8 %

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