# Acct 505 Week 6 Quiz

Submitted By bwilkie
Words 957
Pages 4
1. Question : (TCO D) A company that has a profit can increase its return on investment by

Student Answer: increasing sales revenue and operating expenses by the same dollar amount.
increasing average operating assets and operating expenses by the same dollar amount.
increasing sales revenue and operating expenses by the same percentage.
decreasing average operating assets and sales by the same percentage.
Instructor Explanation: Chapter 12

2. Question : (TCO D) Given the following data, what would ROI be?
Sales \$50,000
Net operating income \$5,000
Contribution margin \$20,000
Average operating assets \$25,000
Stockholder's equity \$15,000

20%

16.7%

80%

Instructor Explanation: See Chapter 12. ROI = Net operating income / Average operating assets = \$5,000 / \$25,000 = 20.0%

3. Question : (TCO D) Given the following data: What is the return on the investment (ROI)?
Sales \$50.000
Net operating income \$5,000
Contribution margin \$20,000
Average operating assets \$25,000
Stockholder's equity \$15,000

20%

16.7%

80%

Instructor Explanation: ROI = Net operating income / Average operating assets = \$5,000 / \$25,000 = 20.0%