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Assume the Residential Division of KappyKappy Faucets had the following results last year:
Net sales $6,360,000
Operating income 636,000
Average total assets 5,300,000
Management's target rate of return 16%
What is the division's return on investment?

Respuesta :

abiolataiwo2015

Answer:

12%

Explanation:

Calculation for the division's return on investment

Using this formula

Return On Investment = Operating income /Average total assets

Let plug in the formula

Return on investment= $636,000/$5,300,000

Return on investment= 0.12*100

Return on investment=12%

Therefore the division's return on investment will be $12%

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