The Modern Language Corporation earned $1.6 million on net assets of $20 million. The cost of capital is 11.5% Calculate the net ROI.

Here was my answer and it turned out incorrect:

1.6/20=0.08

Therefore, the ROI is 8% .

Return on investment - Cost of capital = Net return

8%-11.5%=-3.5%

Therefore, the net return is -3.5%.