The income from operations and the amount of invested assets in each division of Steele Industries are as follows:

The income from operations and the amount of invested assets in each division of Steele Industries are as follows:

                               Income from  |  Invested
                                  Operations  |   Assets
Retail Division           $130,000   |  $650,000
Commercial Division     72,000   |   400,000
Internet Division          137,500   |   550,000

a. Compute the rate of return on investment for each division.

b. Which division is the most profitable per dollar invested?


Answer:
a. Retail Division:      20% ($130,000 ÷ $650,000)
   Commercial Division:  18% ($72,000 ÷ $400,000)
   Internet Division:    25% ($137,500 ÷ $550,000)

b. Internet Division