Tow divisions, what is their return on investment for each division Division Per

Question

Tow divisions, what is their return on investment for each division               Division

                                                                                                               Perth          Darwin

                                                 Sales                                              $7,500,000      $22,470,000

                                                  Net Operating income                    $  502,500      $  1,707,720

                                                  Average operating assets             $2,500,000      $10,700,000

compute the ROI, I know that it's net operating income over sales and I would get .067 for Perth and .076 for Darwin and the answer is still not accpeted, what is that they want?  the system say to round your calculations to 2 decimal places for final answers.

Explanation / Answer

Hi,

Please find the answer as follows:

ROI = Net Operating Income/Average Operating Assets*100

ROI (Perth) = 502500/2500000*100 = 20.10%

ROI (Darwin) = 1707720/10700000*100 = 15.96%

Thanks.

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