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13 Dec 2019
Which of the following formulas calculates the return on investment (ROI)?
a. After-tax Operating Income / Total Capital Employed
b. Residual Income / Sales
c. Total Capital Employed / Operating Income
d. Operating Income / Minimum Expected Return
e. Operating Income / Average Operating Assets
Which of the following formulas calculates the return on investment (ROI)?
a. After-tax Operating Income / Total Capital Employed
b. Residual Income / Sales
c. Total Capital Employed / Operating Income
d. Operating Income / Minimum Expected Return
e. Operating Income / Average Operating Assets
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Related questions
Willow brook Company has thefollowing data for this year:
Bottling Division | Mixing Division | |
Average operating assets | $320,000 | $ 800,000 |
Contribution margin | 160,000 | 500,000 |
Operating income | 80,000 | 120,000 |
Sales | 500,000 | 1,300,000 |
Weighted-average cost of capital | 17% | 17% |
Willow brook Company has a target ROIof 17 percent.
Required: Calculate thefollowing amounts for each division:
a. Return on sales ratio
b. Operating investment turnover
c. ROI
d. Residual income
