Question

Clydesdale Company has sales of $4,500,000, invested assets of $2,000,000, and operating expenses of $3,600,000. The company has established a minimum return on investment of 7%. Clydesdale Company's return on investment is

Answer 1

Answer: 45%

Explanation:

Return on investment = Net operating income / Invested Assets

Net Operating Income = Sales - Operating expenses

= 4,500,000 - 3,600,000

= $900,000

Return on Investment = 900,000/2,000,000

= 45%