Financial information for a recent year for Apples, Inc. is: Sales $40,000,000 L
ID: 430191 • Letter: F
Question
Financial information for a recent year for Apples, Inc. is:
Sales
$40,000,000
Less:
Cost of goods sold
25,000,000
Selling and administrative expenses
5,000,000
Interest expense
1,000,000
Income before taxes
9,000,000
Less: income taxes
3,150,000
Net income
5,850,000
Total assets were $104,000,000 and the non-interest-bearing current liabilities were $2,000,000. The company has a required rate of return on invested capital of 10%.
Calculate the company’s return on investment.
Sales
$40,000,000
Less:
Cost of goods sold
25,000,000
Selling and administrative expenses
5,000,000
Interest expense
1,000,000
Income before taxes
9,000,000
Less: income taxes
3,150,000
Net income
5,850,000
Explanation / Answer
ROI =(Net income/capital employed)*100 here capital employed =total assets -current liabilities
=) (5850000/102000000)*100
=)5.735
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