The following information was presented by User-Friendly Industries Company for an asset purchased at the beginning of the previous year. Original cost of the asset$20,000 Useful life of the asset 10years Annual operating profit, including depreciation$4,000 Salvage value$-0- What is the return on investment (ROI) assuming User-Friendly uses (a) the straight-line method for depreciation and (b) beginning-of-year net book values to compute ROI?
A. 22.2%.
B. 11.1%.
C. 20.0%.
D. 25.0%.
Answer: A
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