Step Up Ladders Company provides the following financial inf

Step Up Ladders Company provides the following financial information: Income from operations Interest expense Gains/(losses) on sale of equipment Net income Total assets at Jan. 1 Total assets at Dec.31 $280,000 48,000 2,600 229,400 2,700,000 3,400,000 Calculate return on investment based on the information given above. (Round your answer to two decimal places.) OA. B. OC. OD. 8.24% 7.52% 10.37% 9.18%

Solution

Average total assets =(Begining total assets + Ending total assets)/2

= (2,700,000 + 3,400,000)/2

= 6,100,000/2

= $3,050,000

Return on investment = Income from operations/Average total assets

= 280,000/3,050,000

= 9.18%

Hence, correct option is (D)