Answer:
Return on investment = 11%
Explanation:
given data
January 1, 2016 December 31, 2016
Current Assets $400,000 $800,000
Plant Assets 3,000,000 3,800,000
controllable margin = $440,000
to find out
Return on Investment
solution
we get her Return on investment that is express as
Return on investment = Controllable margin ÷ Average Total assets ..............1
here Controllable margin is
Controllable margin = [tex]\frac{440000}{400000+3000000}[/tex]
Controllable margin = $440000
and Average Total assets is
Average Total assets = [tex]\frac{800000+3800000}{2}[/tex]
Average Total assets = $4000000
so that
Return on investment = [tex]\frac{440000}{4000000}[/tex]
Return on investment = 11%
