Question

Chavin Company had the following results during August: net operating income, $250,000; turnover, 5; and return on investment (ROI) 19%. Chavin Company's average operating assets were:_________. A. $50,000 B. $47,500 C. $1,250,000 D. $1,315,789

Answer 1

Answer: D. $1,315,789

Explanation:

Return on Investment = Net operating income/ Average operating assets

Average return on Assets will therefore be;

= Net Operating Income/ Return on Investment

= 250,000/0.19

= $1,315,789.47

= $1,315,789