As the manager of Losen division of McCarthy Corporation, you are interested in determining the division's return on investment. As division manager, you have no control over financing assets, but you control acquisition and disposition of assets. The division controller has given you the following data to aid you in calculating return on investment:

Tax rate = 30%.
Required:
What method would be most appropriate for calculating the division's return on investment (ROI)? Why? Using this method, what is ROI for the current year?

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Fiscal Year, January 1 to December 31 (000 omitted): Total assets, January 1 Total assets, December 31 Long-term debt, January 1 Long-term debt, December 31 Owners' equity, January 1 Owners equity, December 31 Net income for the year Interest expense on long-term debt $400,000 525,000 75,000 96,000 278,000 303,000 54,000 4,200