The New Products Division of Testar Company, had operating income of $8,900,000 and operating assets of $45,700,000 during the current year. The New Products Division has developed a potential new product that would require $9,400,000 in operating assets and would be expected to provide $2,300,000 in operating income each year. Testar has set a target return on investment (ROI) of 19% for each of its divisions. Assuming that the new product is put into production, calculate the division's ROI.
A. 19.47%
B. 20.33%
C. 24.47%
D. The answer cannot be determined using the information provided.
Answer: B
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