Bertha’s Birds has $100,000 in invested assets, sales of $1,000,000, income from operations of $11,000, and they have a desired minimum rate of return of 9%. What is the rate of return for Bertha’s Birds?
Explanation
Answer - C - The rate of return for Bertha’s Birds is 11%. 11,000 (income from operations) / 100,000 (invested assets).
Key Takeaway: Net income includes income from operations, discontinued operation sales, extraordinary items, changes in accounting principal, and earnings per share. Income from operations is the income associated with their regular income streams, not including the above items.
