Q1

Hope and Co. is a multi-divisional marketing firm. The performance of divisions is evaluated using financial metrics such as ROI, Residual Income and EVA. For the year ended June 30, 2020, Hope's CEO received the following information about the performance of the sports marketing division:

Sales Revenues	$950,000
Operating Income	$275,000
Total Assets	$1,750,000
Current Liabilities	$325,000
Debt (interest rate: 4%)	$450,000
Common equity (book value)	$550,000

For divisional performance evaluation Hope defined investment as total assets and income as operating income i.e. income before interest and taxes. Hope pays a flat rate of 20% in taxes on income.

(a) What was the Sports Marketing division's ROI for the year? (2 decimal places)