Vello, Inc. Reported a return on investment of 12%, a capital turnover of 5, and income of $180,000. On the basis of this information, the company's invested capital was: A. $300,000.

Question

Mathematics

Newton

14 March, 07:06

Vello, Inc. Reported a return on investment of 12%, a capital turnover of 5, and income of $180,000. On the basis of this information, the company's invested capital was: A. $300,000.

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Answers (2)

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Sanaa Nicholson · Answer 1

Answer: $1,500,000

Step-by-step explanation:

Return on investment = 12%

Capital turnover = 5

Income = $180,000

Invested capital = ?

Return on investment = Net profit / cost of investment

Cost of Investment = Net profit / return on investment

Cost of investment = $180,000/0.12

Cost of investment = $1,500,000

Tamia · Answer 2

Answer: $1,500,000

Step-by-step explanation:

Vello, Inc. Reported a return on investment of 12%, a capital turnover of 5, and income of $180,000. To get the invested capital goes thus:

Formula for return income is:

= Net income / investment

We will now use the formula to compute investment.

12% = 180,000/investment

Investment = 180,000/12%

= 180,000/0.12

=$ 1,500,000