Sagnik B.

asked • 01/15/15

Average Operating Assets Calculation Question Accounting

Last year, our return on investment equaled 20% ; our residual income equaled $50,000, and our minimum required rate of return (cost of capital) was 12%. What were our average operating assets (rounded to the nearest thousand ) ?

A) $625,000 B) $250,000 C) $417,000 D) $333,000 E) $575,000
I believe answer was A) but I need help with steps as to how.

2 Answers By Expert Tutors


Sam L H. answered • 10/08/15

New to Wyzant

Knowledgeable Accounting and Finance Tutor

Sherryse H. answered • 01/21/15

3 (1)

Accounting, Income Tax, Excel

Sagnik B.

Net operating income = $125,000 --> How did you get this figure?


Still looking for help? Get the right answer, fast.

Ask a question for free

Get a free answer to a quick problem.
Most questions answered within 4 hours.


Find an Online Tutor Now

Choose an expert and meet online. No packages or subscriptions, pay only for the time you need.