The following information was presented by Charlie Manufacturing Company for an asset purchased...

Question:

The following information was presented by Charlie Manufacturing Company for an asset purchased the previous year.

Original cost of the asset $12,500
Useful life of the asset 10 Years
Cash flow annual operating profit $2,800
Salvage value $ -0-

What is the return on investment (ROI) assuming Charlie (a) uses the straight-line method for depreciation and (b) average net book values to compute ROI? (Round your final answer to 2 decimal places.) Select the correct answer:

- 26.35%

- 22.40%

- 24.89%

- 14.59%

Return on Investment:

Return on investment is a ratio of measuring the profit earned by the organization by their investment. This ratio is Jamali in percentage and used to evaluate personal financial decisions.

Answer and Explanation:

See full answer below.

Become a Study.com member to unlock this answer! Create your account

View this answer

Learn more about this topic:

Loading...
Return on Investment: Definition, Formula & Example

from Intro to Business: Help and Review

Chapter 25 / Lesson 6
636K

Related to this Question

Explore our homework questions and answers library