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11 February, 09:11

The Electronics Division of Apex Company reports the following results for 2014: Revenues $517,000 Operating expenses $464,000 Operating income $ 53,000 Operating assets $630,000 Apex Company has set a target return on investment (ROI) of 11% for the Electronics Division. The Electronic Division's return on investment is:

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  1. 11 February, 09:23
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    The Electronic division is 8.41% this is below their target return on investment

    Explanation:

    Revenues 517,000

    Expenses 464,000

    Operating Income 53,000

    Assets 630,000

    Return on investment for the electronic division

    operating income / operating assets

    53,000/630,000 = 0.084126984 = 8.41%

    The company expect to yield 9% per dolalr investment

    the electronic division has a yield of 8.41% which is below that.
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