Question

Atlas Company provided the following information for last year: Operating income $ 92,000 Sales 235,000 Beginning operating assets 410,000 Ending operating assets 440,000 Which of the following is Atlas's return on investment (ROI) for last year? (Note: Round answer to two decimal places.) a.0.41 b.0.22 c.0.50 d.0.32 e.0.15

Answer 1

Answer:

ROI for last year will be 0.22

So option (b) will be the correct answer

Explanation:

We have given operating income = $92000

Beginning operating assets = 410000

And ending operating assets = 440000

So average operating assets $=\frac{410000+440000}{2}=425000$

We have to find the ROI

We know that ROI is given by

$ROI=\frac{operating\ income}{average\ operating\ aseets}=\frac{92000}{425000}=0.22$

So option (b) will be the correct option