Return on investment The income from operations and the amount of invested asset

Question

Return on investment The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division Commercial Division Internet Division $100,000 132,600 112,500 $500,000 780,000 750,000 a. Compute the return on investment for each division. (Round to the nearest whole number.) Percent Division Retail Division Commercial Division Internet Division b. Which division is the most profitable per dollar invested? Retall Division v Foodback T Check My Work a. Divide income from operations by invested assets b. Compare the return on investment for each division. The highest percentage is the most profitable per dollar invested Learning Objactive 4

Explanation / Answer

return on investment = income from operations / invested assets

a.

b.Retail division

retail division has the most profitable per dollar invested.

division percent Retail division ($100,000 / 500,000)*100 20% commercial division (132,600 / 780,000)*100 17% internet division (112,500 / 750,000)*100 15%

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