The following selected data pertain to the belt division of Allen Corp

Accounting Dec 08, 2020

The following selected data pertain to the belt division of Allen Corp. for last year:sales = $500,000 Average operating Assets = $200,000 Operating Income = $80,000 Turnover = 2.5 Min. Required Return = 20%What was the return on investment?

Expert Solution

Calculation of Return on Investment:
            = Operating Income / Average Operating Assets
            = $80,000 / $200,000
            = 0.40 or 40%

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