The Income Statement for the Commercial Construction Division of the Kenyon

Multiple Choice

The income statement for the Commercial Construction Division of the Kenyon Company is as follows: $\begin{array}{lr}\text { Sales } & \$ 272,000 \\\text { Operating expenses } & \underline{132,000} \\\text { Net operating income } & 140,000 \\\text { Interest expense } & 20,000 \\\text { Earnings before taxes } & 120,000 \\\text { Income tax expense }(30 \%) & 36,000 \\\text { Net income } & \$ 84,000\end{array}$ If this division's invested capital is $500,000, how much is its return on investment?

A) 19.6%
B) 16.8%
C) 20.8%
D) 14.0%