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: $$\begin{array} { l r } \text { Sales } & \$ 272,000 \\\text { Operating expenses } & 132,000 \\\text { Net operating income } & 140,000 \\\text { Interest expense } & 20,000 \\\text { Earnings before taxes } & 120,000 \\\text { Income tax expense } ( 30 \% ) & \$ 36,000 \\\text { Net income } & \underline { \$ 84,000 }\end{array}$$ 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%