Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: Retail Division Wholesale Division Operating income $ 7,500,000 $ 4,000,000 Operating assets $ 37,500,000 $ 17,500,000 Assuming that these are the only divisions of Terra Company, what is the ROI for the company as a whole? Multiple Choice 20.00% 20.91% 22.86% 42.86%

Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: Retail Division Wholesale Division Operating income $ 7,500,000 $ 4,000,000 Operating assets $ 37,500,000 $ 17,500,000 Assuming that these are the only divisions of Terra Company, what is the ROI for the company as a whole? Multiple Choice 20.00% 20.91% 22.86% 42.86%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 37P

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Question

Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year:

	Retail Division		Wholesale Division
Operating income	$	7,500,000		$	4,000,000
Operating assets	$	37,500,000		$	17,500,000

Assuming that these are the only divisions of Terra Company, what is the ROI for the company as a whole?

Multiple Choice

20.00%

20.91%

22.86%

42.86%

Formula Formula ROI (%) = Net Income Principal Amount × 100

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