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Homework answers / question archive / Marigold corporation reported operating data for its Cheap division for the year

Marigold corporation reported operating data for its Cheap division for the year

Accounting

Marigold corporation reported operating data for its Cheap division for the year. Marigold requires its return to be 10%.

Sales                       $2,000,000

Controllable margin   $80,000

Total average assets  $4,000,000

Fixed costs               $100,000

What is the ROI for the year?

a) 7%

b) 3%

c) 2%

d) 50%

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Computation of the ROI for the year:-

ROI = Controllable margin / Total Average assets

= 80000 / 4000000

= 2%

Hence, the correct option is c) 2%