Parsa Inc. reported the following results from last year’s operations: Sales $ 14,000,000 Variable expenses 9,500,000 Contribution margin 4,500,000 Fixed expenses 3,800,000 Net operating income $ 700,000 Average operating assets $ 7,000,000 At the beginning of this year, the company has a $1,100,000 investment opportunity with the following characteristics: Sales $ 1,980,000 Contribution margin ratio 40 % of sales Fixed expenses $ 653,400 Last year's return on investment (ROI) was closest to:

Respuesta :

Answer:

10.0%

Explanation:

Calculation to determine what Last year's return on investment (ROI) was closest to:

Using this formula

ROI = Net operating income ÷ Average operating assets

Let plug in the formula

ROI= $700,000 ÷ $7,000,000

ROI = 10.0%

Therefore Last year's return on investment (ROI) was closest to:10.0%