accounting homework 95

The 2007 income statement for the east division of the Homegoods Company is as follows:


Sales                                                           $2,000,000

Operating expenses                                      1,250,000

Net operating income                                      750,000

Interest expense                                              150,000

Earnings before taxes                                      600,000

Tax expense (40%)                                          240,000

Net Income                                                   $360,000

If this division’s invested capital is $3,000,000 then its return on investment is:

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