Detailed Answer
Answer (D) is correct.
An investment center is responsible for revenues, expenses, and invested
capital. Given average plant and equipment of $1,775 and average
working capital of $625, the net investment is $2,400. Before-tax profit
is $400 ($4,000 sales – $3,525 cost of goods sold – $75 general
expenses). If before-tax ROI equals before-tax profit divided by net
investment, the answer is 16.67% ($400 ÷ $2,400).