Question

consider the following data and determine which of the corporate divisions is more profitable. explain your reasoning.
domestic
international
operating income
$ 7,000,000
$ 9,000,000
average total assets
10,000,000
30,000,000
begin by selecting the formula to calculate return on investment (roi), and then enter the amounts to calculate each divisions roi (enter your answer as a percent rounded to one decimal place. x x%)
roi
=

Explanation:

Step1: Recall the ROI formula

ROI = (Operating income / Average total assets) × 100%

Step2: Calculate Domestic ROI

Domestic ROI = ($7,000,000 / $10,000,000) × 100% = 70%

Step3: Calculate International ROI

International ROI = ($9,000,000 / $30,000,000) × 100% = 30%

Answer:

The Domestic division is more profitable. Its ROI is 70%, while the International division's ROI is 30%. A higher ROI indicates better profitability as it shows a greater return relative to the assets invested.